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Summer 2008 Volume III Issue II

1. E-Commerce and the Emerging Black Market Mark A. Scanlan

Abstract

This paper examines the changing dynamics of E-Commerce as the racial digital divide continues to shrink. As the fastest growing online demographic, Black consumers will soon be the target of increased interest from firms with an online presence. Applying recent academic and governmental findings regarding the digital divide this paper outlines three key issues that need to be addressed to help attract Black consumers online. These issues include: the need for additional online content that appeals to Black consumers, incomplete knowledge of payment systems other than credit cards that can be used for E-Commerce transactions, and heightened security and confidentiality concerns among Black Internet users.

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2. The Financial and Social Costs of Dropping Out of High School Danielle Lewis, Dek Terrell, and Cecile Guin

Abstract

This study examines the economic cost of dropping out of school for children in Louisiana. We quantify the costs in terms of lower wages and increased propensity for criminal activity.

We find that over the dropout‘s career, he/she can expect to earn $318,876 less (in 2005 $) than a high school graduate. A dropout that turns to a life of crime costs the state $1,686,816 (in 2005 $). While not all high school dropouts commit crimes, both the existing literature and this study finds that dropping out of school increases the likelihood of criminal activity. Considering the fact that not all dropouts will lead a life of crime, our estimates imply a range from $366,107 to $386,349 for the average cost of dropping out of high school in Louisiana.

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3. The Development and Evolution of the Subprime Mortgage Crisis Michael Tucker

Abstract

Speculative bubbles are not new to finance and yet each time they occur, the general realization that they exist arrives belatedly. An information cascade associated with rising home prices fed by low interest mortgage and securitization created a feedback loop that led to an overextension of credit. The information cascade reversed when supply overtook demand and prices began slipping. Borrowers exercised put options rather than continue making payments on mortgages worth more than their homes. Proposed solutions to date have not adequately addressed the problem.

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4. Mapp and McGowan

Abstract

In this paper, a thirteen step process leading to the financial empowerment of Afrikan Americans is developed. The process is presented in three phases, each of which contains key steps that should ideally be followed in order to successfully advance to the next phase. Within the Financial Foundation phase are the five steps, developing the financial plan, establishing emergency funds, learning to manage credit, saving and investment concepts and financial education for children. The Building Wealth phase consists of identifying money to invest, learning about types of investments, starting an investment club, starting a business and planning for retirement. The final phase, Protecting and Preserving Wealth, consists of identifying investment fraud, gaining familiarity with taxes and preparing important papers particularly those concerning estate planning. Implementation of these thirteen steps will lead to financial security for Afrikan Americans.

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