I am doing a research paper in English on "The Masque of the Red Death" and I need a thesis topic on setting.
Sounds like a great topic! Key to your study needs to be the understanding of how Poe uses the setting of the party symbolically to represent the different stages of life and the passing of time - and the ever-encroaching presence of death. Therefore, when it comes to setting, you need to decode what each element represents symbolically.
Note how the seven rooms go from east to west, which symbolises the movements of the sun and moon. This of course represents the life cycle, ending in death in the black room. The seven rooms as well could be said to represent the seven stages of life, seven being a key number in the days of the week and the seven different phases of life. You might also like to think of how the colours might represent each stage. Note too, that in the seventh room, that is swathed in black, there is the gigantic ebony clock. The clock is a powerful symbol of time passing, which in this context means the approaching death that awaits all of the party goers. This is highlighted by the fact that the revellers all stop in silence for a moment or two when they hear the clock mark the passing of each hour - it is as if they recognise their own mortality, but then try to shrug it off for the next hour before it strikes again.
Of course, you will also want to think about how action is linked to setting. It is highly symbolic that it is in the seventh room that Prospero finally confronts his intruder - and dies. It is symbolically fitting that this and the discovery of presence of the Red Death in their midst occurs here, in this black room, which symbolises death. Apparently, the story suggests, no one - not even the rich, arrogant and powerful Prince Prospero - can out-cheat death.