Category Archives: Honors

Walton Ph.D. Student Wins Fellowship to Study Rice, Information, Markets

Information moves markets. That’s something every business student understands – or should.

Jessica Darby wrote her honors thesis on the relationship of rice markets and information while she was a University of Arkansas undergraduate. Now, as a doctoral candidate in the university’s Sam M. Walton College of Business, she’s studying ways that timely and accurate information flowing out of the supply chain can help rice farmers in Arkansas and around the world.

Darby researches how rice farmers get their information about markets and how they make decisions based on that information. She’s asking farmers if better sources of information, additional resources and more analytical tools can be developed to help with market decisions.

In spring 2017, Darby gained support for this research by winning a prestigious and highly competitive Adam Smith Fellowship from the Mercatus Center at George Mason University. The one-year fellowship for graduate students – which includes a quarterly stipend – can total up to $10,000. Fellows also are eligible to apply for conference and research support.

“I believe that working with the Mercatus Center will help me develop market-based tools and address relevant policy levers to reduce the information burden for farmers,” Darby said. “I want to articulate the power of markets in agricultural supply chains.”

Her research can also be a powerful tool in helping the farmers and the economy of Arkansas. Arkansas is the largest rice-growing state in the nation, with the crop grown on 1.3 million acres each year, mainly in eastern Arkansas counties stretching from Louisiana to Missouri.

Darby’s interest in commodities such as rice and the behavior of commodity markets was sparked by an internship as a commodity analyst with an Arkansas-based global trading and sourcing company, and a second internship with one of the largest shippers of grain on the inland river system. The latter gave her insight into the role that public information – especially United States Department of Agriculture reports – plays in decisions.

“In both roles, I was responsible for producing regional analysis to determine potential growth and necessary defense strategies to adapt to changing market and political environments,” Darby said.

Darby was introduced to free-market concepts and information’s impact on commodity trading and pricing through a Walton College supply chain class on capitalism and a class on futures and options in the Dale Bumpers College of Agricultural, Food and Life Sciences. The latter class sparked an interest in working with Andrew McKenzie, a professor of agricultural economics and agri-business.

“He introduced me to Milo Hamilton’s book, When Rice Shakes the World,” Darby said. “Hamilton discusses the implications of policies on the functioning of global rice markets and argues for a ‘freer, market-oriented way for rice.’”

McKenzie directed Darby’s honors thesis on rice futures markets. The two published that research in the U of A undergraduate research journal Inquiry and then extended the research. Darby presented this extended research as a paper at the NCCC-134 Applied Commodity Price Analysis, Forecasting and Risk Management Conference. The two then co-authored an article on the topic – “Information Content of USDA Rice Reports and Price Reactions of Rice Futures” – that was published in Agribusiness: An International Journal.

“Our research shows that the USDA provides the rice futures market with important information needed by Arkansas rice mills and farmers to market their crops,” McKenzie said. “The Arkansas Farm Bureau notes that Arkansas farmers produce more than 9 billion pounds of rice each year, which generates billions of dollars to the state’s economy and accounts for approximately 25,000 jobs, crucial to rural communities.”

The impact of such research on Arkansas and its economy inspires Darby to continue to dig into the topic. “It’s important to me that my research connect to industry,” Darby said. “I have to see the practical application for both farmers and agri-businesses – especially those involved in the food supply chains here in Arkansas.”

McKenzie added that, in an era of declining federal budgets, the kind of research he and Darby have produced provides economic justification for the continued publication of USDA reports. Darby said that it also illustrates an opportunity for the private sector to provide additional valuable information.

“Our results undoubtedly show that USDA reports play a vital role in helping futures markets to discover price and that this is particularly important for the U.S. rice market, where there is a paucity of private data and forecasts to supplement government numbers,” McKenzie said. “However, our research also highlights the fact that rice futures are a thinly traded market with low liquidity and volume.”

McKenzie and Darby are currently engaged in potential research to explore factors that may be driving low trading levels, which increases uncertainty for farmers. Darby said the aim is to determine potential solutions to increase volume and open interest through both regulatory changes and private information provided by partners in the supply chain.

Darby earned a B.S.B.A. in economics from the Walton College in 2015 and a Walton M.B.A. in 2016. She says her passion for reading, research and free-market capitalism left no doubt she would enter Walton’s doctoral program right away. Winning the Adam Smith Fellowship is pushing that passion into a whole different realm, though.

“I believe that it will enable me to examine and better articulate the power of markets in global agricultural supply chains,” Darby said, “as well as the power of global agricultural supply chains in the structuring of global markets.”

Middlespeak: Building Bridges to Immigrant Integration

By Anthony Blake via U of A Honors College Blog

We’ve all seen the photo of Omran Daqneesh, the little boy in an ambulance in Aleppo, covered in dust and blood from an airstrike that destroyed his home. International news has been awash in stories of immigrants crossing borders from Syria and other war-torn nations, and these people and the policies governing them have been demonized or lionized by rival camps.

Nathanael Mickelson’s honors thesis isn’t interested in these binaries: “The truth is always somewhere in the middle.” This history and business economics major is more attentive to the middle spaces, on understanding the historical and cultural reasons for the current migrant crisis. Sure, Mickelson says, if immigrants cannot assimilate into a culture, they can become a burden on an economy, but they can also be integral to countries like Sweden with low birth rates and labor shortages.

As he puts it, there’s a moral and then a feasibility challenge to immigration policies. Mickelson considered the latter, focusing on ways to get immigrants assimilated into an economy. For this he looked at one of the most daunting barriers—the pay gap between workers who speak the native language and those who don’t. Mickelson considered many factors that might affect this—distance from the immigrant’s home country, for example—before striking gold with his research question.

Immigrants who don’t speak the dominant language are at an economic disadvantage, but what effect does the presence of a third language, a lingua franca such as English, have on their chances to assimilate? This is the question Mickelson took up for his honors thesis, and it’s one that hasn’t been looked at before. He chose to focus on Sweden, a country sometimes called the “most open” in terms of its immigration policy, where English is so prominent an American like himself could spend a semester there without learning more than a few words of Swedish. Mickelson comes from Scandinavian stock, his last name is Swedish, and he studied economics at Jönköping International Business School during his junior year. Mickelson said, “Based on my daily life, being able to do well for five months at a Swedish university using English, it made me wonder if, especially with how accessible English is today, that provides an opportunity for a transition market.”

After crunching the numbers with data he collected from the European Social Survey, he found that knowledge of English all but eliminated the language gap. Immigrants could use English, a language much easier for them to learn, as a bridge to Swedish. Through rigorous statistical analysis he found that this greatly improved their chances of economic success.

Raja Kali, Mickelson’s thesis advisor, wasn’t surprised to hear that this research won Outstanding Honors Thesis for the Sam W. Walton College of Business last spring. “It’s really an outstanding piece of scholarship. He was able to gather data and provide a statistical analysis to shed light on this question, and that’s not easy, even for someone who’s a well-established and experienced researcher.” He says it’s a great sign for future potential.

Mickelson, whose research was funded by a SURF grant, realizes this work is a small but valuable piece of a bigger puzzle. “There are a ton of variables to a complicated problem like immigration. The more and more puzzle pieces we find out, the more complete our puzzle is. I think that’s really the key to research and the driving force of this. The future of this research is finding more specific data for this question and finding what the practical applications are. Would it be feasible in practice to have this English transition labor market?”

Mickelson is currently finishing up his math minor and has been encouraged by Kali to apply to top graduate schools across the country for economics. But he wants to come back: “I think Fayetteville is one of the few places where whatever you believe or your background is, it’s open arms. Ideally the Arkansas kid in me wants to wind up in a couple of random places, make some new memories but come back to teach in Fayetteville when I get my PhD.”

Matthew Evans Named Boyer Fellow for 2015

College is a life-changing experience for many students. For 2015 freshman Matthew Evans, his life changed before he even went to his first college class. Evans is the 2015 Boyer Fellow in the Sam M. Walton College of Business at the University of Arkansas. He was a superior student at Conway High and already headed for Fayetteville and the U of A when he was selected as a Boyer Fellow. Continue reading Matthew Evans Named Boyer Fellow for 2015