Thesis (Master of Science in Applied Economics)

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A qualitative choice analysis: examining the factors shaping the patterns of mortgage payment irregularities
(BRAC University, 2023-12) Kabir, Mohammad Hasan; Quadria, Taufiq Hasan
This thesis examines the factors influencing mortgage payment irregularities among individuals. A positive association between higher financial literacy and irregularities challenges the expected results of a negative correlation. While financial education shows potential long-term impacts, home equity loans exhibit stabilization effects that contribute to regular payments. Risk-taking preferences display anticipated connections with irregularities, but financial goal confidence has a surprisingly positive tie to fluctuations in payments. Though improved financial education emerges as a critical implication, the results reveal complex financial decision dynamics, demanding further investigation into the mechanisms driving mortgage behaviors. The limitations of the data sources, measurements, omitted influences, and evolving risk perceptions highlight the need to refine our understanding through continued research on the intricate factors shaping mortgage payment patterns. Ultimately, unraveling these nuances promises major advancements in literacy programs, policies, and lending practices aimed at greater stability across mortgage and economic landscapes.
A Theoretical approach to the equity vs. efficiency argument for income taxes
(BRAC University, 4/25/2013) Al-Majid, Ahmed Waris; Khan, Wasiqur Rahman
Since the start of the economic crisis, many economists had wondered about the best way to get out of this situation. Seeing the massive movements directed at inequality, this author wondered if inequality was built into the system or a consequence of policy decisions. This paper was written in the hope of, atleast partially, answering this question.
A thesis on utilizing machine learning models to predict material hardship
(BRAC University, 2023-12) Das, Tirtha; Quadria, Taufiq Hasan
This thesis addresses the concern of material hardship, defined by a paucity in resources necessary to fulfil fundamental needs, especially affecting children and families. Drawing insights from studies on the determinants of material hardship, including low income, unemployment, single parenthood, and financial literacy, the research employs a comprehensive methodology. It incorporates the integration of machine learning techniques to enhance the predictive capacity of identifying at-risk populations. The methodology advocates for a holistic approach, incorporating the transformative potential of machine learning techniques such as Logistic Regression, Non-Linear Support Vector Machine Model, Decision Tree etc. This paper highlights the transformative potential of machine learning in proficiently analyzing extensive datasets to recognize complex patterns. The positive correlation established between higher financial literacy, bill paying tendency, management of finances and improved economic outcomes stresses the potential impact of targeted financial education initiatives. Moreover, the research emphasizes the need for a proactive stance, advocating for the development of predictive models using historical evidence to anticipate and address material hardship in a timely manner. The inferences emphasize the necessity for targeted interventions and proactive measures, promoting social equity, resilience, and contributing to broader poverty reduction strategies
Access barriers to financial inclusion: a study of the Ugandan case
(BRAC University, 2021-06) Onzia, Judith Eyoa; Amin, ATM Nurul
Financial inclusion is a policy concern around the world. Uganda’s financial sector comprises formal, semi-formal and informal institutions that offer services such as banking services including opening bank accounts, savings deposits, and access to credit, bill payments, mobile money, and insurance. Financial institutions have routinely excluded many citizens. Since poor and low-income people do not have much cash, non-access to credit has limited their participation in the market. This study on the financially excluded population has explored barriers to access financial services. To identify these barriers, the study is based on experience, on reports from the financial institutions of Uganda, and on the relevant literature. To assess these obstacles, the Delphi method was adopted, i.e., selection of experts in the area of financial inclusion and obtaining their feedback on the identified hypothesized access barriers to the financial services in Uganda. The study has given particular attention to the causes of barriers to financial services, and suggested measures that may improve inclusion in Uganda. The methodology has included designing a survey instrument, which was sent to 22 experts through email, facebook and whatsapp. These experts were Uganda citizens, both female and male, in the financial sector, NGOs, government officials and institutions, academicians, and researchers. The survey has obtained data on the access barriers to financial inclusion. The hypothesized access barriers have been, on the demand side, have been low income, illiteracy, and limited awareness of financial services, and on the supply side, access barriers included security risks, high transaction costs, poor network infrastructure, ICT and limited access channels. Feedback analysis has revealed that young, poor, and rural individuals are mostly excluded. Financial services are indeed not accessible to rural communities who are largely served by the informal village savings groups, loan associations, and unregistered Savings and Credit Cooperatives Associations (SACCOs). Conversely, formal financial services are available and used widely in urban areas. Public policy may change this situation by disseminating information on available services and by customizing such information to better serve potential rural users.
An essay on the factors of income
(BRAC University, 2022-07) Aktari, Syeda Jahirin; Begum, Salma
This paper examines the effect of different factors on the composition of individuals earning by using the Panel Study of Income Dynamics (PSID) data. This paper also exhibits the contribution of individual’s non-cognitive skills and first occupation on yearly real earning. The contribution towards the literature of this paper is few ways; finding real change in income due to different factors; using different categories of occupation to estimate the result; developing ability index to measure the non-cognitive skill. The result finds a strong effect of education on individuals' earnings. The result also shows other factor’s importance on individual earnings and finds evidence of the contribution of first occupation and noncognitive ability on real earnings.
An experiment on trust behavior: the endowment and reputation effect on fear, temptation, and cooperation in continuous trust game
(BRAC University, 2024-11) Bhuian, Shamsul Shahriar; Haider, A S M Shakil
This thesis explores the dynamics of trust and trust-based behaviors such as fear, greed, and cooperation in a continuous trust game experiment, comparing a model based on the Prisoner's Dilemma with a proposed theoretical model for the FTC (Fear, Temptation, and Cooperation) Index. The study hypothesizes that financial conditions, specifically initial endowments and social conditions, such as Reputation, would influence trust-related decisions by reducing fear and greed and promoting cooperation. The research explored various non-parametric analyses and regression to explore the latent effect of the Endowment and Reputation through their mediators on fear, greed, and cooperation. Surprisingly, initial endowment proved insignificant across both models and regression analyses, suggesting that financial factors may not play as vital a role as anticipated. Instead, social factors, particularly reputation, significantly influenced trust behavior. The findings indicate that a healthy, trust-promoting environment fosters cooperation more effectively than financial incentives alone. The proposed model better captures these social dynamics and outperforms the Prisoner's Dilemma-based model in predicting trust-related outcomes. This research underscores the complexity of human decision-making, where psychological and social elements, such as reputation, often outweigh financial considerations in fostering trust and cooperation, reducing societal and individual fear and greed.
An exploratory analysis of economic growth and governance indicators of Bangladesh, 1996-2018
(BRAC University, 2020) Anoy, Newaz Masud; Robin, Iftekhar Ahmed
Bangladesh has been experiencing a steady economic growth around seven percent for the last few years. Although the economy is growing faster but the governance indicators are showing a different scenario in six dimensions of governance: voice and accountability, political stability, government effectiveness, regulatory quality, rule of law and control of corruption. Thus, there has been a wrangle regarding the relationship between economic growth and governance. This thesis examines the relationship of World Governance Indicators (WGI) and GDP growth of Bangladesh. Both exploratory and econometric analyses of the relationship have been undertaken. The study estimates regression model using data for the period, 1996-2018. The regression results find that control of corruption (CC) is the most important governance variable that influences positively on economic growth. Similarly, rule of law (RL) shows significant positive relationship to economic growth. Although the estimated coefficient for voice and accountability (VA) is statistically significant, the negative magnitude of the coefficient does not really reflect the expected impact on GDP growth, perhaps due to small sample size of the study. However, the remaining three variables such as government effectiveness (GE), regulatory quality (Reg) and political stability (PS) are not found statistically significant and have not really impacted economic growth in Bangladesh. Therefore, if corruption can be curbed and ensure rule of law, we will able to attain a steady higher economic growth. In this paper, we have carried out tests to determine the presence of serial correlation. The results show no presence of serial correlation, hence, no corrective measures required. As the sample size is small there are the issues of stationarity, causality, multicollinearity, endogeneity that may arise in time series model. Within the purview of this analysis, we refrain from carrying out further tests of perfect collinearity, heteroskedasticity, stationarity, etc for the purpose of simplicity. However, such tests are highly recommended for more reliable and robust results.
Analyzing wage gap based on gender: insights from the Bangladesh Labor Force Survey 2016-17
(BRAC University, 2025-01) Aishi, Shamima Khandakar; Kamal, K.M. Arefin
Bangladesh has one of the lowest gender salary discrepancies in the world, with a deficit of just 2.2% as of the most recent data, according to UN research. This thesis investigates the gender wage gap in Bangladesh using data from the Labor Force Survey (LFS) 2016-17, focusing on non-agricultural workers. The quantitative analysis based on secondary data reveals significant disparities in wages, working hours, education levels, and industry participation between male and female workers, reflecting deep-rooted structural inequalities in the labor market. On average, Men earn more than women. The study also found that female workers have lower levels of education and are more likely to be concentrated in low-paid industries, both of which contribute to the income gaps. To understand how human capital affects wages, mincer regression has been used to examine the causal connection between earnings, experience, and education. The results highlight the necessity of focused governmental initiatives to advance gender parity in schooling and labor market involvement, especially in industries with a preponderance of men.
Bank profitability- a study on the private commercial banks in Bangladesh
(BRAC University, 2021-08) Galib, SK Ahsan; Robin, Iftekhar Ahmed
The thesis examines the influence of bank-specific variables on bank profitability in Bangladesh for the period, 2014-2018. The sample contains data of the 13 largest private commercial banks which has been chosen on the basis of assets size. The panel data regression models are estimated using bank level annual data from the sample banks. The regression results show that interest income and capital adequacy have positive and statistically significant impact on banks’ profitability. On the other hand, increased non-performing loans (NPLs) decrease bank profitability. Therefore, bank should invest in economically viable projects. The monitoring and supervision of the loan portfolio should be strengthened to reduce default loans (NPLs) in order to increase profitability of the banks in Bangladesh. The findings of this study would help the banks’ investors, policy makers, other stakeholders and management for improving the performance and decision making of the financial institutions especially banks in coming times.
Capital adequacy, asset quality and profitability: a study on conventional banks in Bangladesh
(BRAC University, 2026) Afroze, Chowdhury Tahrima; Khan, Wasiqur Rahman
This study examines the relationship between capital adequacy and asset quality with profitability. Capital is main factor of banks and adequate capital works as the insurance and confidence factor for the banks. If NPL of banks increases, the cost of funding cannot be recovered. This increased cost of funding decreases the ROA, ROE, and NIM in Bangladesh. Provision kept due to increased NPL creates an obstacle in the case of lending, which ultimately decreases the profit. Profitability is also affected by bank size. It is easier for banks to achieve economies of scale if they have large asset size but incapability of achieving economies of scale will lower the profit of banks. In this study a sample size of 20 conventional banks out of 34 have been selected covering the period 2009 to 2018. This study uses the capital adequacy ratio, equity to asset ratio, bank size, NPL to total loan, and loan loss provision to total assets as proxies for capital adequacy, and asset quality. Return on assets, return on equity and net interest margin are used as proxies for banks‘ profitability. Capital adequacy is considered as the main driver of many financial institutions. KMO and Bartlett‘s test, Descriptive Statistics, Analysis of Variance (ANOVA), Coefficient Analysis, Correlation analysis, Trend Analysis has been used in this study. For multiple regression analysis three regression models are developed. Equity to asset is positively related with ROA, ROE, and NIM. NPL to total loan, loan loss provision to asset have a negative impact on profitability. Though CAR and bank size are negatively related to ROA and ROE, they are positively related to NIM fulfilling the expected results and hypothesis.
Coping mechanism of informal trading enterprises in adverse situation: a case study of street vendors in the Narayanganj City, Bangladesh
(BRAC University, 2021-06) Nayam, Kushnuma Tun; Amin, ATM Nurul
Street vendors operate their economic activity despite routine extortions and harassment. Eviction policy however dislodges these petty traders throwing them in uncertainty of earning an income for living. This was evident in recent actions of Narayanganj City Corporation (NCC) from clearing the pavements. Meanwhile from mid-March 2020, lockdown arising from COVID -19 has been affecting street trading. In this backdrop, this study explored coping mechanisms street traders adopt in these three major adverse situations. Other than field observations, a questionnaire survey was conducted in five selected locations of the city. Other than these worksites, for the household level information, the survey was also conducted at their dwelling units for household level information. Collected information includes worksite conditions, socioeconomic conditions including migration background, dwelling units’ conditions, and how they cope with eviction, extortion, and the pandemic. Income, employment, asset, and health are the four indicators that were used for comparing the effects. On income, the data showed that most of the street vendors face income loss from frequent eviction and routine extortion. On employment, findings show that most street traders changed their jobs for a short time. They wait for an opportunity to come back or move to another location. Only 12 percent left street vending as a consequence of eviction. Extortion does not lead to change in employment. This practice allows work continuity by enduring harassment and or bribing. Almost 80 percent changed jobs during the first phase of COVID -19. On assets, the findings showed that street vendors suffered asset loss in the form of using up savings. About 42 percent used their savings for coping with the consequence of eviction. The corresponding proportions are 14 percent for extortion and 24 percent for the pandemic. On health, about 60 percent suffer from anxiety due to eviction, extortion, and the ongoing pandemic. Injury from assaults is common. Most street vendors reported that there are sanitation facilities nearby, but they are not allowed to use it. Dengue is cited as the most common ailment. Other health related problems include hearing problems, headache and skin disease. Evidence on coping mechanisms or response to the difficulty encountered suggests a kind of stickiness with street trading. This is evident in the survey data of 80 percent respondents reporting that they return to the same activity. About 11 percent reported that they moved to another economic activity - still in the city. Only 4 percent returned to their villages, and another 5 percent engaged in alternative occupations in their respective villages. Policy implications of this research include specifying hawking points for street trading; eviction decisions ought to be accompanied with rehabilitation programs; and clear earmarking of certain locations for vending and non-vending. Supportive policies at city level include planning authority to have provisions of physical or spatial accommodations for street vendors.
Does the adoption of solid cooking fuel contribute to adverse child health outcomes? A Propensity Score Matched (PSM) analysis from Bangladesh Demographic and Health Survey, 2011- 2018
(BRAC University, 2022-11) Chowdhury, Rupok; Khan, Dr. Wasiqur Rahman
Low birth weight and severe respiratory infections in children are just two of the acknowledged negative health impacts of household air pollution caused by the use of solid fuels for cooking, which is still a serious public health concern in underdeveloped nations. Using data from Bangladesh demographic and health census 2011-2018, the paper evaluates the effects of dirty fuels on health. The application of propensity score-matching method by year unadjusted and later unbiased year adjusted estimation with average treatment effect on the treated (ATT) shows that dirty fuel households have a 37.8% greater incidence of stunting than clean fuel households and no link with having ARI with solid fuel use, which is biased result for unadjusted matching. However, this ATT estimate after year-specific match shows 33-35% rise of malnutrition and 2.8 to 5.6% increase in respiratory illness because of solid fuel adoption. Due to the shortcomings of this study, more research is needed to better devise strategies to discourage households from using solid cooking fuel and encourage the use of more affordable, healthier alternatives.
Does working from home boost productivity
(BRAC University, 2024-11) Khondaker, Sanjana; Shafiullah, Muhammad
This study investigates the impact of remote work on employee productivity, exploring the roles of autonomy, training, and individual characteristics in dictating employee performance. Using cross-sectional data from the Chinese General Social Survey (CGSS), I employ various methodological approaches to address selectivity bias and endogeneity concerns inherent in the analysis. Initially, ordinary least squares (OLS) regression is utilized to estimate associations between remote work, autonomy, training, and productivity. Subsequently, a multinomial logit model is employed to identify which individuals are more likely to do remote work. To mitigate potential bias, propensity score matching estimator is used, considering observed heterogeneity between remote and non-remote workers. Furthermore, instrumental variable (IV)-free Gaussian Copula and Lewbel methods are also utilized to assess the causal effect of remote work on productivity. The findings reveal that remote work positively impacts employee performance, however, long hours or frequent remote work negatively affect productivity. Notably, a significant causal relationship is identified. Additionally, greater autonomy and training are associated with enhanced productivity. Moreover, demographic factors such as gender, marital status, and parental responsibilities influence remote work tendencies, with educated individuals exhibiting lower likelihoods of remote work, while those receiving training and receiving greater independence tend to opt for remote work arrangements.
Economic development and female labour participation in SAARC countries: a test of the U-shape hypothesis
(BRAC University, 2019-03) Rahman, Adrita; Khan, Wasiqur Rahman
The paper explores whether there exists U shaped hypothesis among the 8 SAARC countries. It first looks at the SAARC nations by implementing the fixed effects model and then analyses the countries individually to see if the relationship between economic growth and the female labour force participation (FLP) holds. The U-shaped hypothesis states that when an economy is in the rudimentary stage of development, it experiences high rates of FLP; more women are involved in the agricultural sector. As the country undergoes transformation, the FLP falls. Finally, when the nation has embraced modern economy, more women join the labour market. Additionally, this paper also highlights the country specific barriers that prevent women from joining the workforce and gives policy recommendations that each of the South Asian economies can adopt to promote greater FLP.
Effects of climate change variables on under-five child stunting in Bangladesh
(BRAC University, 2023-09) Khan, Tausif Amin; Shafiullah, Muhammad
This research paper explores the impact of geospatial variables and sociodemographic factors on child stunting in Bangladesh, using data from the 2014 wave of BDHS (Bangladesh Demographic and Health Survey) and climate data from Bangladesh Meteorological Department (BMD) spanning 2009 to 2013. It was found that the average age of children under 5 in the sample is approximately 29 months (about 2 and a half years), with mean weights and heights slightly below the expected values. The climate data indicates that Bangladesh experiences mean maximum temperatures of over 34°C and mean minimum temperatures of around 21°C, with a relatively high average relative humidity of 79%. Rainfall averages 738.6 mm (about 2.42 ft) across divisions with low variability. Visual analysis shows that temperature has a limited impact on children's height, while higher relative humidity and rainfall are linked to height stunting. Regression analysis confirms these findings, revealing that increased relative humidity negatively affects the Height-for-Age Z-Score (HAZ) by nearly 2 percent, while rainfall has a minimal to no impact on HAZ. Male children have a 12 percent higher HAZ, and higher parental education and family wealth positively influence children's HAZ scores. These results contribute to our understanding of the factors influencing child stunting in Bangladesh and emphasize the importance of addressing both climate-related variables and sociodemographic factors to improve children's nutritional outcomes.
Effects of local wages on female joint decision of marriage and working: a cross-data analysis
(2024-05) Shrity, Salma Sultana; Kamal, K.M Arefin
This research investigates how rising local wages in Bangladesh influence young women's joint decisions regarding marriage and labor force participation. It conducts a comparative analysis of female involvement across districts characterized by diverse wage levels, unveiling nuanced responses to economic stimuli. The analysis, employing a cross-sectional survey focusing on young women aged 18-30, reveals a significant relationship between local wages and labour force participation for unmarried women. These rising local wages incentivize unmarried women to prioritize career pursuits over marriage, potentially due to increased financial independence and career opportunities. Conversely, the impact of local wages on the decision-making of married women is less pronounced. While there is a slight tendency for married women to remain employed as local wages rise, wages do not significantly influence the decision to enter the workforce. These findings highlight the likelihood of a woman's decision regarding marital status and workforce participation. They also hold valuable insights for policymakers aiming to design interventions that promote gender equality and empower women in the Bangladeshi workforce.
Environmental policy instruments use-design for improving E-waste management in Bangladesh
(BRAC University, 3/21/2021) Irthiza, Ahmad; Amin, ATM Nurul
‘Electronic Waste’ or ‘E-waste’ management is a growing concern in Bangladesh, as the toxic components of E-waste have a severe effect on health and the environment. The existing policies for managing such environmental problems are largely based on regulatory measures ignoring the economic and ethical dimensions. With this view, the central objective of this study is to propose a policy package combining regulatory, economic, and persuasive measures. Together they are denoted as Environmental Policy Instruments (EPI). For doing so, the research has been conducted in two phases. In the first phase, the study investigates the current E-waste situation in Bangladesh concerning (i) E-waste generation, collection, and disposal practices; (ii) the condition of workers engaged in E-waste recycling; (iii) consumer and public awareness on E-waste management; and (iv) the existing legal framework for its management. In the second phase, an EPI use-design is proposed to improve the E-waste management practices. In doing so, E-waste generators' feedback has been considered. The main database of the study, compiled through an online survey, includes information on E-device usage, its disposal, and consumer awareness. Secondary sources were the basis of compiling information on E-waste generation, recycling, condition of workers involved in E-waste recycling, and their corresponding legal framework in the country. Findings of the study include that only 11.1% of the consumers dispose of their discarded Edevice as waste, of which only 23% of E-waste is appropriately processed for recycling, and the rest is disposed of by either burning or dumping on the ground. Despite E-waste management being a highly hazardous occupation, the wage of the laborers in the E-waste recycling industry in Bangladesh is extremely low (3,000 taka a month). The awareness and concern among the consumers on E-waste generation, its effect on nature and life, and the importance of its sustainable management are limited regardless of respondents’ education or profession. Concerning the legal framework, the study finds that the existing policies regarding E-waste management are largely based on environmental Acts and other regulatory frameworks. Although a guideline for E-waste management has been drafted, no exclusive guideline or policy for E-waste management is currently in practice in Bangladesh. Finally, a target-specific EPI use-design is presented comprising (i) regulatory instruments (regulation, supervision, identification) to control the generation, recycling of E-waste, and ensure labor rights and safety, (ii) economic instruments (pollution tax, recognition, investment) to discourage the cheap and hazardous methods of recycling, disposal, and encourage research and development to transform E-waste recycling industry into a profitable business opportunity, and (iii) persuasive instruments (social engagement, awareness campaign, curriculum reform) to raise awareness of E-waste stakeholders on the importance and ways and means of its sustainable management.
Exploring the relationship between inflation and economic growth: a panel data study on South Asia
(BRAC University, 2022-07) Muzib, Kazi Maneeha; Munshi, Dr. Farzana
Inflation and economic growth are two very important macroeconomic variables that stir a lot of interest. This paper explores the relationship between inflation and growth for six countries in South Asia, namely Bangladesh, Bhutan, India, Sri Lanka, Nepal and Pakistan. The study consists of panel data techniques like the LLC unit root test, and the fixed effect model to explore the relationship between inflation and growth for the countries in the sample over the time period 2000-2019. The study finds an overall positive relationship between the two variables for the overall sample. However, the country specific effects dissipated through OLS regression shows a positive relationship between inflation and economic growth for Bangladesh, Sri Lanka and Nepal, and a negative relationship for India, Bhutan and Pakistan. The study further finds a significantly negative non-linear relationship for the sample, where the threshold of inflation of is 5.80% and above this rate, inflation can have negative impacts on economic growth and vice versa.
Forecasting market movement in Dhaka Stock Exchange: LSTM vs. ARIMA
(BRAC University, 2019-04) Chakraborty, Pranjal; Khan, Wasiqur Rahman
This paper creates and examines the performance of LSTM models against ARIMA models, using Dhaka Stock Exchange data from beginning of 2000 to the beginning of 2019. An algorithm has been designed to simultaneously train and test the models using datasets of 340 companies of the market. The empirical result shows the absolute dominance of ARIMA over LSTM, which contradicts some previous works. At the end, we try to discuss the possible reasons behind the unsatisfactory performance of LSTM and explore some of the possible future expansions and extensions of the current work.
Gender Wage Differentials and Intrinsic Motivations: An Empirical study on Nonprofits
(BRAC University, 2022-07) Jeheen, Nubayra; Begum, Salma
Conducting a Blinder-Oaxaca decomposition technique and a modified Recentered Influence Function quantile regression using the Bangladesh Labour Force Survey 2016-17, the paper estimates the gender wage differential and the impact of intrinsic motivation in the nonprofit and for-profit sectors. The study finds that nonprofits pay a relatively higher wage to their employees, supporting the intrinsic motivation-productivity hypothesis. However, the results cannot conclusively state that nonprofits exhibit a lower gender wage gap in light of this hypothesis. On the other hand, the gender earnings gap for for-profits is primarily driven by differences in worker endowments. Male for-profit workers suffer from a substantive wage penalty compared to the men employed in nonprofits with similar quantified attributes. No such penalty is found for women. The author also finds evidence of a glass ceiling within the nonprofits and a sticky-floor within for-profits.