Wharton Research Scholars
Wharton Research Scholars is an intensive one-year research program for a select group of students who are interested in conducting research under the supervision of some of Wharton’s preeminent faculty members. As part of the program, participants complete an honors thesis.
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Publication Unveiling financial inclusion: transaction size and cashless payment use in Mexico(2023) Bernstein, HeatherIn Mexico, only about 47% of the population has a bank account and almost all transactions are conducted in cash— trends notably lower than in countries with similar levels of GDP per capita. To examine this phenomenon, this study analyzes the use of cashless payments by transaction size in Mexico between 2002 and 2022. The results reveal that in 2022, cashless payments accounted for 4.4% of transactions and 13.4% of transaction value (MXD). Subsequently, cashless payment use is more frequent for higher value transactions than for lower value ones. Analysis of payment use for different segments of the population reveals significant urban-rural and socioeconomic gaps. Analysis of payment usage across distinct transaction types indicates that the location of purchase influences payment preferences more than the spending category. Lastly, debit cards and electronic funds transfers have experienced the most growth in payment usage between 2016 and 2022 in Mexico, particularly for medium and high value transactions. However, informal credit such as tabs remain popular for very low and very high transaction values. Given that cashless payment use is of principal importance in promoting equal access to financial services, results from this study suggest that public policy should tailor financial products and services to rural and low-income households, reduce the informal economy, and address payment infrastructure disparities.Publication Private Equity and Lender Dynamics in Corporate Financial Distress(2024) Tong, AndrewThis paper presents an analysis of the role of private equity (PE) and lender dynamics in financial distress. Employing a dataset of leveraged loans from 2011 to 2019, this study explores relationships between PE sponsors and creditors in corporate restructurings and updates prior literature from previous periods. Preliminary findings suggest that PE sponsors not only increase the propensity of default but also manage to decelerate the default process. In doing so, they preserve equity value. Comparably, institutional loans, which are predominantly covenant-lite, intensify default risk yet delay default timing. Enhanced sponsor reputation and greater lender concentration are both associated with slower default times, possibly the product of more favorable financing and decreased coordination costs. These dynamics promote more efficient restructuring outcomes, driven by a higher tendency for out-of-court solutions over Chapter 11 bankruptcies. This paper thus indicates that the interplay of sponsor and creditor characteristics leads to heterogeneous default outcomes.Publication Sexually Transmitted Disease Prevalence and Survey Non-Response Rates in Asian Americans(2023) Lin, IsabelleSexually transmitted diseases (STDs) are one of the most prevalent diseases in America with an estimated annual incidence of 20 million cases.1 Over 50% of U.S. adults will have one STD in their lifetime.2 From 2017 to 2021, total reported STDs increased by 7%.3 Studies have shown that people of color often suffer disproportionately from these diseases. Thus, racial and ethnic disparities in STDs are national priorities. Asian people do not appear to show higher STD rates than White people. However, through analyzing publicly available datasets from the CDC, it is revealed that Asian people have the highest non-response rates for questions regarding sexual health. Using an additional study conducted on a survey platform, it was found that Asian people also showed significantly lower levels of willingness to discuss sexual health with family and answer questions about sexual health on surveys compared to other topics like general health care. This indicates that while on the surface, Asians appear not to suffer from sexual health disparities, in actuality, STD rates may be higher than Whites but are masked due to non-response. Research into Asian sexual health remains greatly understudied. These findings demonstrate that further inquiry is warranted to understand trends of non-response and produce a more accurate estimate of prevalence.Publication Impact of Insurance Coverage on Access to Eating Disorder Treatment(2024-05-01) Sadioglu, YaelThe rising incidence and severity of eating disorders, along with demonstrated gaps in access, requires a better understanding of eating disorder treatment, particularly the insurance coverage landscape. In order to address this gap, I conduct a two-part analysis by identifying the insurance-related barriers to access and designing informed policies targeting those barriers. Using a framework developed by Eisenberg and Power (2000), I develop a conceptual model of voltage drops, defined as challenges that patients encounter that reduce the likelihood of receiving high-quality care for their eating disorders. I then conduct semi-structured interviews with 11 field experts from treatment centers, advocacy organizations, and legal backgrounds to gather their insight on barriers to accessing eating disorder treatment and suggestions to remove those barriers. I use rapid qualitative methods to identify key themes across interviews. Key barriers include public insurers’ inadequate coverage of ED services, private insurers’ narrow networks, restrictive eligibility criteria such as BMI cutoffs, and frequent utilization reviews with length of stay limitations. The main suggestions include expanding Medicare and Medicaid coverage, increasing standardization and transparency for private plans, and ensuring parity between eating disorders and other mental and physical health conditions. Finally, I translate the qualitative findings into actionable and comprehensive policy initiatives that target individual voltage drops. These include 1) policies targeting data collection via national organizations, such as CDC and NIH, 2) policies enhancing coverage for both public and private insurers through congressional agencies and state-level mandates, and lastly, 3) policies introducing accountability through network adequacy standards with secret shopper studies, and grassroots efforts, such as report cards and insurer rating platforms. Overall, this paper underscores the need to transform public and private insurance coverage for eating disorders and provides profound and targeted policy initiatives to do so.Publication Regulating Payday Lending(2024-05-21) Sun, MichaelThe 2017 Rule on Payday, Vehicle Title, and Certain High-Cost Installment Loans issued by the Consumer Financial Protection Bureau (CFPB) aimed to curb debt traps and better protect consumers from predatory small-dollar lending practices. By mandating ability-to repay analyses, limiting rollovers, and enhancing disclosure requirements, the rule sought to shield borrowers from unfavorable loan terms and harmful products. This paper investigates whether the CFPB achieved its intended policy objectives by examining the impact of the 2017 rule on consumer complaints regarding payday lenders. Using the CFPB’s public Consumer Complaint Database, I employ a difference-in-difference research design that measures changes in payday loan complaint volumes around the rule’s introduction relative to a control group of mortgage loan complaints. My analysis reveals a statisticallysignificant 18.4% increase in payday loan grievances reported to the CFPB after the rule took effect. These findings reflect success in empowering and educating consumers about their rights through disclosure requirements and financial literacy efforts, with elevated grievances signaling more assertive enforcement of violations.Publication Competition Or Monopoly For Kuala Lumpur’s Metro Rail Industry?(2023) Mohd Zarif, Aini SofiaPublic transportation in the Greater Kuala Lumpur area (KL) has been receiving particularly increased spotlight in recent years. As the government plans for the public transportation network’s expansion to accommodate for the population growth and alleviate traffic congestion in KL, critics raise concerns about the reliability and practicality of the existing system. This thesis seeks to answer the question of which operating model, competition or monopoly, best suits the KL metro rail landscape. After analyzing the operating models of Hong Kong and Singapore as reference points of gold standards of monopoly and competition-based settings respectively, this thesis recommends KL should shift to a competition-based operating model and be more aggressive in implementing Land Value Capture (LVC) mechanisms to diversify away from significant reliance on government funds and fare revenues. Additionally, it is also important to have sound checks and balances in political and government involvement especially pertaining to the appointment and termination of top level executives of government-linked organizations directly involved with the rail transit industry such as Mass Rapid Transit Corporation Sdn Bhd (MRT Corp) and Prasarana Malaysia Berhad (Prasarana).Publication Analyzing Key Events & Causal Factors Impacting Cryptocurrency Lending Rates(2023-01-01) Bobovich, NicoleDigital asset markets reached peak valuations of more than 3 trillion in 2021. However, the strong growth in crypto asset value in 2021 was met with turmoil and value destruction in subsequent years with a series of bankruptcies of cryptocurrency-related businesses in a period dubbed the "crypto winter." This study considers the impacts of the events of the crypto winter on decentralized lending protocols, specifically using the Aave protocol as a case study. Looking at data centered on interest rates, available liquidity, and the total value of invested funds on the Aave protocol, this study seeks to better understand how investors' perceptions of the safety of borrowing cryptocurrencies have changed after the events of the crypto winter. The study will aim to look at predicting spreads between variable and stable interest rates with an OLS regression and analyze the impacts of the crypto winter using historical Aave lending data.Publication Efficacy of Game-Based Learning In the Teaching of Abstract Concepts(2023-05-24) Zhang, EdwardGame-based learning has been around for quite some time, but serious games have emerged as a promising field for education. Games provide a structured learning experience with built-in incentives that motivate players to master the game's rules and objectives. In addition, modern game technologies have enabled the use of immersive graphics, which can enhance the players' understanding of the underlying concepts. Overall, serious games and graphics have the potential to revolutionize education by making it more engaging, interactive, and effective. This thesis highlights the potential for game-based learning and computer graphics technology to expand beyond the realm of computer science and teach abstract concepts in other fields. By leveraging the unique features of games and graphics, such as their interactive nature and immersive experiences, it may be possible to create effective educational tools for a wide range of subjects. The attached resources and materials provide a foundation for future research and development in this field, with the ultimate goal of improving education and expanding the ways in which people learn and understand complex concepts. Though results remain inconclusive, this novel take on serious games and hopes to act as a stepping stone for future work in serious games exercising the mediums’ strengths in ways that go beyond the traditional routes of immersion and competitiveness.Publication The Effect of Upzoning on Single-Family Building Permits: An Intermediate Term Analysis of the Minneapolis 2040 Plan(2023-01-01) Selvamani, SonaIn 2020, over 30% of households had unaffordable rent. Policymakers currently believe the solution to this affordable housing crisis is to allow for denser development in areas by implementing less restrictive zoning policies. While evidence shows that increased restrictiveness in zoning can negatively affect prices or the supply of housing, there is little evidence on whether upzoning can reverse these consequences. This paper uses Minneapolis city’s 2019 ban on single-family (R1) zoning to close this gap and find out what effects a more liberal change in zoning policy might have on building permits in the area. I use the U.S Census Bureau Building Permits Survey to test the effect of this policy on construction permitting from 2016-2021. Statistical results prove that there was a reduction in single-family permitting in Minneapolis after the policy implementation date compared to other communities in Hennepin County, MN. However, there is no conclusive difference in total units and multi-family units permitted after the policy was implemented. This paper sheds light on the intermediate term effects of upzoning and encourages policymakers to assess these policies more carefully.Publication Judicial Determinations of “Majorness” – The Major Questions Doctrine as a Political Question(2023-01-01) Weng, TheodoreMuch of the robust expansion of the modern administrative state can largely be attributed to the Chevron doctrine, which empowers government agencies with broad interpretive authority in the case of legislative ambiguity. Congress frequently empowers agencies through legislation that grants them rulemaking authority over their areas of expertise. However, in the Supreme Court opinion West Virginia v. EPA, the Court has put forth a judicial framework called the “Major Questions Doctrine” to analyze agency deference cases. The construction of the framework represents a departure from Chevron deference, perhaps signaling a shift in the court’s administrative law jurisprudence. At all steps of the Chevron analysis (or even in place of Chevron), the court now asks whether the agency’s assertion of power represents an extraordinary case that is of economic and political significance. The court then requires a “clear statement” by congress on the agency’s sphere of authority on the issue. This comment argues that the Supreme Court’s reliance on the Major Questions Doctrine as a tool to advance the revival of the nondelegation doctrine and curtail agency power is misguided. The “new” version of the doctrine represents a significant departure from the Congress centric approach to administrative law cases. In order to strongarm judicial enforcement of nondelegation, the courts have taken a position as the arbiter in determining economic and political significance. This position raises several separations of powers concerns. Specifically, I argue that the determination of ‘majorness’ by the courts falls under the category of non-justiciable questions under the political questions doctrine. I observe how the growing prominence of the Major Questions Doctrine represents an intrusion by the courts into a process that should largely be left to a conversation between congress and government agencies. The courts are ill equipped to make these determinations as they have failed to provide proper guidance regarding judicially discoverable and manageable standards for resolving questions of majorness. Furthermore, the court’s proposed position in congressional legislation and agency rulemaking expresses a lack of respect for Congress, as a policymaker, and government agencies, as a regulator. Judicial determinations of economic and political significance amount to nothing more than adjusting the framing of impact. A significance threshold should instead be discussed between agencies, with their unique knowledge and subject matter expertise, and Congress, as publicly accountable representatives that empower agencies in the first place. If the major questions doctrine is, at its core, meant to adjudicate conflicts over delegation of authority, how can congress be expected to issue clear statements if congress itself does not have final say over what is major? Ultimately, the major questions doctrine is an attempt by the judiciary to claw back interpretive power from the executive branch, despite being ill suited to do so. I conclude that the MQD is a categorically erroneous attempt at revisiting nondelegation, merely inviting judges to take part in the legislative process, and make arbitrary, political designations on matters of public policy.