What About the Buyers? Deriving Factors of Demand in the U.S. Black Market

Author

Eric S. Schneider, Bellarmine UniversityFollow

Date of Project

4-7-2025

Document Type

Honors Thesis

School Name

W. Fielding Rubel School of Business

Department

Economics

Major Advisor

Dr. Frank Raymond

Second Advisor

Dr Bradley Stevenson

Abstract

The vast majority of econometric research regarding black markets focuses on the supply. Relatively little information is definitively shown in academic literature regarding the drivers of demand for black markets. This project seeks to identify factors of demand for black market goods and services. First, this paper gives a brief definition of the broad definition of black markets, before specifically defining the scope of individual markets which will be included in this project. Next, there is a brief review of recent literature on the U.S. black market in order to determine prime candidates for factors of demand. Then, a robust econometric model is created and adjusted to account for issues such as multicollinearity, heteroskedasticity, and serial correlation. Finally, the project results are explained and the most significant factors of demand for the U.S. black market are identified. This project exists to find patterns which exist in the significance of variables in the presence of changing levels of buyer risk and external social cost. The paper concludes by providing advice on how the American regulatory environment can be adjusted to best shrink and defend against buyers in American black markets.

Recommended Citation

Schneider, Eric S., "What About the Buyers? Deriving Factors of Demand in the U.S. Black Market" (2025). Undergraduate Theses. 170.
https://scholarworks.bellarmine.edu/ugrad_theses/170