Session D: 3:30PM – 5PM
SESSION D (3:30-5:00PM)
Location: Parlor B, A. Ray Olpin University Union
Testing the Deterrent Effect of Sentence Lengthening Legislation on Violent Crime
Holly Day, Southern Utah University
Faculty Mentor Joshua Price, Southern Utah University
SESSION D 3:30-3:45PM
Parlor B, Union
This paper explores the assumed deterrent effect of longer sentence length on the frequency at which violent crime is committed. To do this, an econometric analysis of state panel data using a difference-in-differences model examines the effects of sentence lengthening legislation by comparing a treatment group of states that have enacted stricter sentencing policies to a control group of states that have not done so. Many policymakers and voters believe that longer sentencing increases the costs of crime which discourages potential criminals, thus having a determinant effect on the rate at which crime is committed. This paper tests the hypothesis that the supply of violent crime is, for the most part, inelastic to costs such as sentencing lengths. Some possible explanations for this lack of elasticity might be the complexity of the legal system itself and/or a misunderstanding of the motivations that incentivize criminals.
Black Scholes Delta Hedge in Imperfect Markets
Mitchell Pound, Utah State University
Faculty Mentor Pedram Jahangiry, Utah State University
SESSION D 3:50-4:05PM
Parlor B, Union
The Black-Scholes model for pricing European call options relies on continuous delta hedging with prices distributed log-normally with a known, constant volatility. This only works in a perfect, “friction-less” market. We simulate cumulative returns for a market maker using a discrete delta hedge with different time intervals between rebalancing the portfolio. A Julia package is developed by the authors to achieve this goal, which will be open source for the benefit of the public. Using the Julia package, we estimated the distribution of cumulative returns for a delta hedged portfolio by Monte Carlo analysis. This is done using both a log-diffusion parametric model and stationary bootstrap of historical returns for simulated stock prices. With both the parametric and non-parametric models, as the time between rebalancing the portfolio decreases, the variance of the returns decreases, while the expected return is near 0. This provides empirical evidence that a Black-Scholes delta hedge is a viable hedging strategy for helping market makers to better manage and quantify their risk, even given market “imperfections”.
The Public Perception of Terrorist Activity Measured Against Database Evidence
Chandler Robinson, Utah Tech University
Faculty Mentor Jessica Abbott, Utah Tech University
SESSION D 4:10-4:25PM
Parlor B, Union
Data shows that Americans are fearful of a variety of different crimes; some more than others. Understandably, Americans are particularly fearful of the idea that a terrorist attack may effect their lives in some way. As destructive as these events have the potential to be, they are uncommon in comparison to fear index data. This study seeks to understand how demographics and media consumption determines an individual’s perception of terrorist groups and organizations.
Keywords: Terrorism, Media, Crime