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This dissertation contains four essays in spatial and international economics. Chapter 1 investigates how housing variety varies across space. Housing costs are key in understanding real income differences across space and time. Standard measures of housing costs do not account for availability differences, where some housing varieties are available in certain cities or time periods but not others. When households have idiosyncratic preferences over housing units, the set of available housing varieties in a city matters. This paper develops theoretically-founded housing price indices to measure housing costs that account for availability differences. To allow for flexible substitution patterns, I propose a method to jointly estimate the nests that varieties belong to and the elasticity of substitution across varieties within each nest. I find that households in larger cities benefit from having access to varieties not available in smaller cities. Utility-consistent housing prices reduce the elasticity of housing prices with respect to population by a half. Since housing is a third of household expenditure, this implies that we have systematically underestimated real income and overestimated residual amenities in larger cities. In contrast to previous estimates, I find that real income is increasing in city size after accounting for availability differences. Chapter 2 investigates the factors that cause incomplete pass-through of exchange rate shocks into border prices. This paper examines the role of decreasing returns to scale, a channel that has received limited empirical and theoretical attention. Based on a first-order approximation to a firm's optimal price, I show that 1) decreasing returns to scale interacts with variable markups, imported inputs, and destination non-traded costs to generate incomplete pass-through, 2) there is asymmetry between importer currency and exporter currency shocks due to imported inputs, and 3) strategic complementarity matters, where firms adjust their prices in response to competitor prices. I propose a new estimation method for key demand and supply parameters that govern the degree of markup and marginal cost adjustments. Using the estimated parameters, I find that decreasing returns to scale is the dominant factor in generating incomplete pass-through, with variable marginal costs contributing to over 90% of the incomplete pass-through, while variable markups account for less than 10%. Chapter 3 analyzes the determinants of exporter size. Theories of comparative advantage and product differentiation have emphasized productivity and quality differences. This paper shows that incorporating decreasing returns to scale matters for understanding the determinants of exporter size. Exogenous marginal cost differences affect equilibrium quantities but do not necessarily appear in prices since lower exogenous marginal costs (a lower cost curve) are offset by higher endogenous marginal costs (movement along the cost curve). As a result, standard approaches that assume constant returns to scale underestimate the contribution of marginal cost differences and overestimate the contribution of quality differences. Based on bilateral trade flow data between 1997 to 2016 for over 200 countries and 3000 products, I find that standard approaches attribute almost no variation in exporter size to cost differences. In contrast, after incorporating decreasing returns to scale, I estimate that 58% (65%) of the variation in exporter size is attributed to fundamental cost differences in the time series (cross-section). Chapter 4 models and quantifies the dynamic gains from exporting. I develop a dynamic trade model where firms innovate and learn from other firms in the destinations they sell to. The evolution of a country's stock of knowledge can be expressed as a function of export flows and the stocks of knowledge of their trading partners. I find evidence that countries in Asia, North America, and Europe, as well as countries in the top two quartiles of TFP growth were able to better absorb foreign insights than other countries. I evaluate whether there are dynamic gains from trade with two counterfactual exercises. First, I measure the impact of changing trade costs between 1962 and 2000. I find small static gains but zero dynamic gains for the world economy. Second, I quantify the dynamic gains from export-induced foreign knowledge flows by simulating a counterfactual where there is no learning from foreign sources. I find that domestic learning compensates for foreign learning: there are large dynamic gains from exporting when there is no domestic learning and small dynamic gains when there is domestic learning.

This thesis explores several aspects of state and local governments' finances and its interaction with the real economy. The first chapter explores the question of what the fiscal position of local governments is and how the financial market assesses it. I find that a large share of municipalities operate with a negative net position-akin to a negative book equity position in the corporate context. I find that most of the decline in the fiscal position originates from the accumulation of legacy obligations, i.e. pensions and other post-employment benefits (OPEBs); this is recognized by municipal bond markets through higher credit spreads. While accounting values from the annual comprehensive financial reports are informative, they are based on book valuations which potentially convey limited information about the economic value of assets and liabilities. Thus, I turn to the market valuation of local governments' equity by estimating an stochastic discount factor that matches the valuation of a wide range of assets in the economy to prices future tax and expenditure claims. Using market prices for tax and expenditure claims, and market valuations of liability positions I find that the market values of equity are highly correlated with the book values. The negative equity position-in terms of book and market values-for some local governments suggests the presence of implicit insurance by state and federal governments. In the second chapter I utilize quasi-experimental variation in Connecticut to causally estimate the policy response of local governments and the migration response of residents to a large fiscal shock. I find that local governments adjust tax rates to maintain stable tax revenues; there is no change in public employment levels and limited adjustments of public services. The micro data on people's location further allows me to causally estimate the migration elasticity to a change in property tax rates. I find evidence of inter-state migration in response to an increase in property tax rates; and no statistically significant response of intra-state migration. Detailed property and location choice data reveal the elasticity of migration with regard to the property tax bill. An increase in the property tax bill by ten percent leads to an average increase in the migration propensity by about 1.5%. In the third chapter I explore the contribution of the local fiscal constraint channel on the local economy. I show that the observed general equilibrium response to local labor market shocks contains an economically important amplification effect through local financial constraints. At the center of the local fiscal constraint channel is the housing market. Local governments in the United States receive a median share of 63.13% of own source revenues from property taxes. I show that exogenous shocks to local labor markets affect the housing market and exerts fiscal pressure on local government finances. Local governments-on average-increase property taxes and cut amenities. Both policy responses affect the relative attractiveness of a location which amplifies the initial shock. I estimate a multiplier of 1.7x through this local financial constraint channel for employment.

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This study has been conducted in order to determine whether yellow-poplar (Liriodendron tulipifera Michx.), has the economic and technical potential to be manufactured and marketed as oriented strandboard (OSB) in Elkins, West Virginia and Frederick, Maryland. The estimated annual excess growth of yellow-poplar near Elkins could provide more than enough timber to supply a 120 MMSF OSB facility (3/8-inch basis); however, the estimated annual excess growth of yellow-poplar available near Frederick is insufficient to provide the total wood requirement for a facility of this size. Yellow-poplar is a relatively low density species, and is suitable for the production of OSB. The manufacture of yellow-poplar OSB is viable, employing commercially available technology. OSB is a suitable substitute for softwood plywood sheathing. The panel markets within radii of approximately 300 miles of both Elkins, West Virginia and Frederick, Maryland are sufficient to support the addition of a 120 MMSF OSB facility at either location. Equipment and operating requirements and costs have been estimated for 1982. Using a USDA Forest Service computer program, EVALUE, an internal rate of return on investment (IRR) of 15.2 percent was calculated for Elkins, and 14.3 percent for Frederick. The sensitivity of facility productivity to an increase of 10 percent in the cost of wood, and resin, and to a 10 percent decrease in the price of panels has also been calculated. / M.S.

This study examines effects of unpredictable price fluctuations and possible catastrophic losses on the optimal site preparation intensity of un thinned loblolly pine plantations under the assumption of lisk aversion. It concentrates exclusively on financial motives and does not take non-market values and portfolio considerations into account. The results should be interpreted with these limitations in mind. Two approaches are taken to compare site preparation intensities: a quasideterministic approach, where expected cash flows are discounted with risk-adjusted discount rates, and a stochastic approach, where probability functions of cash flows are used to maximize expected utility from net present values. The stochastic approach is further divided into non-adaptive scenarios and adaptive scenarios, where the investor can gather additional price information during the life of a stand to optimize the harvest decision. The adaptive management problem is solved with stochastic dynamic programming. For each possible harvest age, an optimal reservation price below which the forest landowner should not sell the stumpage is calculated. The study shows that the use of a single risk-adjusted discount rate is generally inadequate to compare different management intensities. The stochastic approaches reveal that the optimal management intensity depends on the degree of risk aversion, with increasing risk aversion leading to a lower intensity level. Given the possibility of catastrophic losses, the adoption of a feedback harvesting policy strengthens the already dominant influence of risk aversion and does not generally lead to an increase in management intensity. The study's results suggest that even if the landowner is managing the forest solely for financial reasons, some of the reluctance to invest in intensive forestry may not indicate a lack of interest or information but simply an economic reaction to risk, especially in regions with a high potential danger of catastrophic losses. / Ph. D.

As the coal reserves at shallow depths become exhausted companies have to develop deeper deposits and increase percentage extraction to maintain production levels. Total extraction for room and pillar mines can only be achieved by pillar extraction. The unsupported roof increases during pillar extraction and hence the cost of ground control also increases. Nevertheless, pillar extraction where possible has many potential advantages such as decreased operating cost, increased utilization of reserves, and extended life of the mine. There are several variables such as depth, mining height, rock strength, mining geometry, roof and floor conditions, and retreat mining methods, which affect pillar extraction cost. Cost components of pillar extraction are classified as direct, indirect, fixed, and subsidence compensation costs. A discounted cash flow pillar extraction cost simulator has been developed and used to compute total pillar extraction cost for a variety of conditions and to explore the possibilities of optimizing ground control and retreat mining techniques to maximize extraction ratio. The computer program computes the safe and optimum pillar dimensions and determines the suitable pillar extraction method for the computed pillar width. Pillar extraction cost components are generated and totalled using the net present value method by the simulator. The total extraction cost simulator evaluates the potential advantages of pillar extraction and tests individual variables for sensitivity to changes in other variables attributable to ground control and pillar extraction techniques. Cost of pillar extraction per ton of coal versus depth is presented in the form of a simple nomogram by the simulator. The simulator can be used to determine the economic feasibility of pillar extraction at a particular depth, geologic and mining environment when the market price of mined coal is known. / Ph. D. / incomplete_metadata

This study was designed to compare the financial situation of both remarried and first-married families from a large randomly selected sample. An adaptation of Campbell, Converse, and Rogers' "Model of Life Satisfaction" was used as the theoretical basis for this investigation. Data were compared to assess differences in (a) personal characteristics; (b) objective attributes, the personal resources of homeowners hip, income, education, employment status, and occupation; (c) perceived attributes, financial attitudes and management behaviors of respondents; (d) evaluated attributes, an assessment of financial situation; and (e) satisfaction level with financial situation. The respondents were a sub-set from pre-collected data sets entitled Financial Attitudes and Practices of Virginia Citizens, Form A and Form B, (N=1098). Responses to items identical in both survey forms were merged to create a new data base which was used in this study. A sample of 173 remarried and 173 first-married respondents was used. Descriptive statistics were used to profile the two respondent groups. Independent t test and chi-square analyses were used to compare responses by marital status. Remarried and first-married respondents were similar in personal characteristics except in ethnicity and gender role philosophy with the remarrieds having a more egalitarian than traditional philosophy. The two groups were similar in objective attributes except in educational attainment. The remarried spouses were not as well educated as their counterparts. Financial management behavior and attitudes were similar for both groups except in the area of risk management and capital accumulation. Both groups reported a positive net worth and adequate income, however, remarrieds were less satisfied with their financial situation than first-marrieds. The results of this study demonstrated differences in the financial domain of remarried and first-married households and pointed to areas of concern for educators and family life specialists. / Master of Science