Thesis (Ph.D.)--Indiana University, Dept. of Economics, 2006. / "Title from dissertation home page (viewed July 5, 2007)." Source: Dissertation Abstracts International, Volume: 67-08, Section: A, page: 3090. Adviser: Eric M. Leeper.

Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 2006. / Source: Dissertation Abstracts International, Volume: 67-07, Section: A, page: 2665. Adviser: Hadi Salehi Esfahani. Includes bibliographical references (leaves 113-117) Available on microfilm from Pro Quest Information and Learning.

Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 2006. / Source: Dissertation Abstracts International, Volume: 67-07, Section: A, page: 2679. Adviser: Hadi Salehi Esfahani. Includes bibliographical references (leaves 139-147) Available on microfilm from Pro Quest Information and Learning.

Thesis (D.A.)--Indiana University, Dept. of Economics, 2006. / Source: Dissertation Abstracts International, Volume: 67-04, Section: A, page: 1449. Adviser: James M. Walker. "Title from dissertation home page (viewed May 7, 2007)."

Thesis (Ph.D.)--Indiana University, Dept. of Economics, 2006. / Source: Dissertation Abstracts International, Volume: 67-04, Section: A, page: 1454. Adviser: Eric M. Leeper. "Title from dissertation home page (viewed May 14, 2007)."

This dissertation collects three pieces of work. The first chapter documents empirically how Danish households substituted between insurance and liquidity, namely how the up-take of unemployment insurance fell when credit suddenly became more cheaply available for some. The second chapter presents results from a natural field experiment comparing financial and non-financial incentives to promote pro-social behavior. Finally, the third chapter presents the theoretical motivation for and results from a laboratory experiment conducted in Iceland on measuring time preferences conditional on incomes not changing, or correcting for the change when they do.

This dissertation consists of three essays, two in behavioral economics and one on the economics of innovation. The first essay, which is joint work with Emily Glassberg Sands, exploits the randomness of weather and the relationship between weather and movie-going to quantify network externalities (i.e., a preference for shared experience) in movie consumption. Instrumenting for early viewership with unanticipated and plausibly exogenous weather shocks captured in LASSO-chosen instrument sets, we find that a shock to opening weekend viewership is doubled over the following five weekends. Our estimated momentum arises almost exclusively at the local level, and varies neither with ex-post movie quality nor with the precision of ex-ante information about movie quality, suggesting the observed momentum is unrelated to learning. The second essay, which is joint work with Michael Luca and Deepak Malhotra, asks whether higher wages elicit reciprocity and hence higher productivity. In a field experiment with 266 employees, we find that paying above-market wages, per se, does not have an effect on productivity relative to paying market wages (in a one-time job with no future employment opportunities). However, structuring a portion of the wage as a clear and unexpected gift--by offering a raise (with no additional conditions) after the employee has accepted the contract--does lead to higher productivity for the duration of the job. Targeted gifts are more efficient than hiring more workers. However, the mechanism underlying our effect makes this unlikely to explain persistent above-market wages. Finally, the third essay examines how an incumbent's patent protection acts as an implicit subsidy towards non-infringing substitutes. I analyze whether classes of pharmaceuticals whose first entrant has a longer period of market exclusivity (time between approval and generic entry) see more innovation. Instrumenting for exclusivity using plausibly exogenous delays between patent filing and the start of clinical trials, I find that one extra year of first in class exclusivity increases subsequent entry by 0.2 drugs. The effect is stronger for drugs targeting conditions for which demand is more price-elastic, and for drugs that are lesser advances.

This paper uses data on more than 1000 national leaders between 1875 and 2005 to examine how four key individual characteristics – military experience, being a member of a political dynasty, belonging to the ethnic majority, and the number of daughters – influence the rate of economic growth. Following Jones and Olken (2005), I identify leadership transitions caused by natural deaths and illnesses to isolate the effect of leaders on economic growth, sidestepping the causality that runs between economic growth and the timing of leadership transitions. I find that even though leaders do seem to matter for economic growth, there does not seem to be substantial evidence that the identified characteristics systematically influence national growth. I then examine if these characteristics affect relevant policy outcomes. Although I do not find substantial evidence that the identified characteristics systematically influence the policy outcomes, I do find some evidence of a relationship between a leader’s ethnicity and the infant mortality rate, as well as between the number of daughters a leader has and the female and male adult mortality rates.

While some states can send men to the moon and back, others cannot even muster the effectiveness to maintain order. Understanding what produces these differences in the capabilities of states to deliver outcomes to their citizens is central to understanding why these outcomes differ across states. But what are the fundamental determinants of state capability? This has not yet been investigated; though previous attempts have been made to understand what the most popular state capability index actually measures, these were made to determine its validity, not its fundamental determinants. I empirically determine that there are four fundamental determinants of a state’s capability to deliver outcomes for its citizens by using a rigorous application of factor analysis to four state capability indexes: Outcomes delivered by a state are determined by the ``Effectiveness'' by which states are able to implement their ``Political Gumption'' (their responsiveness and political resourcefulness to satisfy the demands of their citizens) in the face of pressures, represented by the ``Absence of Internal Pressures'' and ``Popular Support and Absence of External Pressures.'' These determinants drive the differences in the capabilities of states to deliver outcomes for its citizens, and consequently at least partially drive the differences in outcomes across states.

This dissertation consists of three essays on the relationship between firm incentives and energy and environmental policy outcomes. Chapters 1 and 2 study the impact of the 1990 Clean Air Act Amendments on the United States oil refining industry. This legislation imposed extensive restrictions on refined petroleum product markets, requiring select end users to purchase new cleaner versions of gasoline and diesel. In Chapter 2, I estimate the static impact of this intervention on refining costs, product prices and consumer welfare. Isolating these effects is complicated by several challenges likely to appear in other regulatory settings, including overlap between regulated and non-regulated markets and deviations from perfect competition. Using a rich database of refinery operations, I estimate a structural model that incorporates each of these dimensions, and then use this cost structure to simulate policy counterfactuals. I find that the policies increased gasoline production costs by 7 cents per gallon and diesel costs by 3 cents per gallon on average, although these costs varied considerably across refineries. As a result of these restrictions, consumers in regulated markets experienced welfare losses on the order of $3.7 billion per year, but this welfare loss was partially offset by gains of $1.5 billion dollars per year among consumers in markets not subject to regulation. The results highlight the importance of accounting for imperfect competition and market spillovers when assessing the cost of environmental regulation. Chapter 2 estimates the sunk costs incurred by United States oil refineries as a result of the low sulfur diesel program. The complex, regionally integrated nature of the industry poses many challenges for estimating these costs. I overcome them by placing the decision to invest in sulfur removal technology within the framework of a two period model and estimate the model using moment inequalities. I find that the regulation induced between $2.8 and $3.3 billion worth of investment in order to produce this new fuel. The results highlight the importance of accounting for sunk costs when evaluating environmental regulation, and suggest that the estimation approach used here might provide a viable way to estimate the sunk costs of other environmental policies. Chapter 3, coauthored with Hunt Allcott, turns the to retail market for water heaters to study the topic of energy efficiency. We run a natural field experiment at a large nationwide retailer to measure the effects of energy use information disclosure, customer rebates, and sales agent incentives on demand for energy efficient durable goods. We find that while a combination of large rebates plus sales incentives substantially increases market share, information and sales incentives alone each have zero statistical effect and explain at most a small fraction of the low baseline market share. Sales agents strategically comply only partially with the experiment, targeting information at more interested consumers but not discussing energy efficiency with the disinterested majority. These results suggest that at current prices in this context, seller-provided information is not a major barrier to energy efficiency investments. We theoretically and empirically explore the novel policy option of combining customer subsidies with government-provided sales incentives. / Public Policy