This dissertation investigates the productive performance of the private manufacturing sector of Egypt, particularly within the context of economic reforms undertaken since the early 1990s. Beginning in 1991, the Egyptian government implemented reforms to achieve macroeconomic stabilization and to promote private sector development. We utilize complementary methodologies to analyze the growth of total factor productivity (TFP) and its decomposition into efficiency and technical change. We use nonparametric methods, including the Malmquist and Tornqvist approaches to measuring TFP, along with stochastic frontier methods to undertake the analysis. It is well known that the stochastic frontier approaches have the advantage of allowing statistical noise in the measurement of efficiency while the nonparametric methods do not. However, we use recently developed bootstrapping methods to study the sensitivity of the nonparametric indices to sampling variation of the frontier they measure. The analysis is based on a newly developed panel of 28 three-digit sectors from 1987/88 to 1995/96. Our analysis indicates that a considerable increase in technical progress is due to the loosening of impediments to competitive forces. We find that growth in total factor productivity would be higher if growth in technical efficiency were higher. Cost savings are found as a result of the increase in total factor productivity. We also use a generalized cost function to study the impact of the economic environment on all sectors. This approach, which subsumes the 'naive' neoclassical cost function as a special case, allows us to assess the impact of institutional constraints on the structure of production, including factor demands, total cost and scale economies. Our findings indicate the presence of substantial distortions in relative prices, and hence on cost efficiency, due to the binding institutional and regulatory constraints. In addition, we find that these inefficiencies are magnified among large firms. We find improvements in efficiency as a result of reforms initiated to remove the constraints.

In this dissertation, I develop a dynamic general equilibrium simulation model with overlapping generations divided into 12 lifetime income groups to examine the economic effects of replacing the current U.S. federal personal and corporate income tax system with a broad-based consumption tax. This model extends previous research in a number of directions; in particular, it models tax-deferred assets explicitly and allows for progressive capital income tax rates. The results indicate that the inclusion of tax-deferred assets favorably affects the welfare of the oldest generations at the time of reform in middle and upper income groups. In addition, the consumption tax reform is more regressive in the transition and steady-state with the explicit inclusion of tax-deferred assets when compared to a base case where the taxation of pensions is modeled as a flat rate consumption tax. Allowing capital tax rates to vary progressively across the 12 income groups has the expected effect of increasing welfare gains to upper income groups during the transition and steady-state, while reducing the welfare of lower income groups. This dissertation also examines the importance of wage profiles and bequests on consumption tax reform-induced welfare changes. Age-wage profiles estimated from the Panel Study of Income Dynamics greatly improve previous estimates. Wage profiles from a sample consisting only of heads of households leads to a wider distribution in income earned across the lifetime income groups compared to a sample that includes wives, and thus a larger variance in the distribution of welfare changes induced by a consumption tax reform. Bequests are a significant determinant of welfare changes only for elderly households alive at the time of reform.

This dissertation consists of two essays. The first essay is a theoretical study of a dynamic game played between the consumers and a monopolistic seller who can use checkout coupons. The paper shows how checkout coupons can increase the profit of a monopolist, when both the seller and the consumers have private information. Double-sided uncertainty is necessary for the profitability of checkout coupons, but does not guarantee it. Increase in profit comes at a loss of efficiency: the quantity sold decreases. The second essay is an empirical study of the causes and consequences of current trends in the market for passenger vehicles. During the last 30 years, light trucks have become an increasingly popular substitute for a passenger car. The sales and the share of light trucks in the US vehicle fleet has been increasing. We use accident data to show that light trucks are safer than cars, and that the safety advantage increases with their share in the vehicle fleet. We show that this may be the force that drives the popularity of light trucks. Unfortunately, light trucks impose a significant safety externality on other road users. This external cost is greater than the safety benefit to light truck occupants. We estimate that 2086 fatalities could be avoided during the year 1999 if the share of light trucks was lowered to the level that prevailed in the year 1970.

In the first essay, titled "Is Economic Transition a Health Hazard? Estimating the Short-term Effect of Income on Self-assessed Health in Russia: 1994--2000," I use data from the Russian Longitudinal Monitoring Survey to estimate the causal impact of income on self-assessed health status of adults. Accounting for the possibility of reverse causation and incidental association between health and income, as well as controlling for various socio-demographic characteristics, the results from both ordinary least squares and instrumental variables models suggest that the causal effect of income on health is negligible in the period under study. The second essay, titled "Health and Relative Income in Transitional Russia," presents evidence on the importance of relative income for individual health in Russia. Controlling for the absolute level of income, all relative income measures which are based on distances in incomes between individuals are found to be not significant. Using cross-sectional variations in the data, however, individuals' percentile ranks are positively correlated with health within relatively broadly defined reference groups. This result, generally consistent with previous studies on the importance of social ranks, suggests that increasing everybody's income equally may be inconsequential for health. Nevertheless, after controlling for individual heterogeneity, this study finds no evidence that any of the relative income measures is associated with individual health. In the third essay, coauthored with Eli Berman and titled "Fertility and Education in Radical Islamic Sects: Evidence from Asia and Africa," we find that fertility is significantly higher among families with members attending Islamic schools in all five countries. Returns to education are generally lower among these families, though that result is statistically significant in only two of the five samples, the ones with a more precisely defined indicator of Islamic education. These findings are consistent with the predictions of a club-good model of religious sects as well as with previous results for Ultra-Orthodox Jews in Israel and Anabaptist sects in North America, suggesting a common pattern of behavior across sects of different religions, as well as.

This work documents and analyzes three pricing practices that are common to the retail food industry: quantity surcharges, downward price rigidity and nine-ending pricing. Quantity surcharges happen when food retailers assign higher unit prices to larger packages. Downward price rigidity means that the retailers' response to wholesale decrements is less than proportional than to wholesale increments. Nine-ending pricing refers to the practice of setting the rightmost digit of a price at nine. The findings on the quantity surcharge practice reveal its usage is significant and persistent. The analysis indicates that food retailers may use this strategy to price discriminate among different types of consumers.

This thesis sheds some light on factors that affect the level and stability of investment in economies with undeveloped capital markets. In particular, we focus on shocks to the demand for bank liabilities (checks). Banks are the major source of finance for firms, and fiat money and checks are the main media of exchange for households. To what extent is investment stimulated by liquidity shocks that increase the demand for bank liabilities? Our analysis is less relevant for economies with developed capital markets. However, to understand how the evolution of capital markets affects the stability and growth of investment, we focus on economies where banks are still important and capital markets are undeveloped. The thesis is composed of an empirical and a theoretical analysis. We first show with linear regression estimates that the effect of the variance of demand deposits on that of investment is statistically significant in countries with undeveloped capital markets. Such is not the case for developed countries. We then proceed to provide a theoretical analysis of how liquidity shocks affect investment in developing countries. Throughout our thesis, we model liquidity shocks as resulting from changes in the amounts of relocation of spatially separated agents searching for trading partners. Spatial separation is a trading friction which endogenously gives rise to fiat money as a medium of exchange. The relocation of agents has the effect of changing the demand for liquidity. This changes the demand for investment-backed inside money and therefore impacts investment. This contrasts with the Clower constraints/infinite horizon models in the literature where the real sectors of an economy, and hence capital, are insulated from monetary effects. We provide two spatial separation/overlapping generations models. We show that equilibrium capital is affected by liquidity shocks due to the overlapping generations (OLG) structure. OLG is analogous to the case of households borrowing constraints, a feature of economies with undeveloped capital markets. Specifically how investment responds to liquidity shocks depends on the timing of the shock. In the first model, we show that when the young are hit with a liquidity shock, capital is a non-monotonic function of the shock. In the second model, old agents are subject to a liquidity shock. In this case, capital is an increasing function of the liquidity shock.

Sellers' reputation and bidding behavior on eBay auctions for brand new and used commodities. Using an original dataset of eBay auctions for brand new and used video games, this article shows that sellers of used commodities charge reputation premiums. Reputation, however, have no effect on the price of relatively inexpensive brand new commodities. Reputation did not have significant effects on the probability of making sales or bidding late. Timing of the bids on eBay auctions for brand new goods. The existing literature on online auctions has pointed out an empirical regularity with respect to the timing of the bids: Most of the bidding activity is concentrated at the end of the auctions. Roth & Ockenfels (2002) argued that bidders wait until the end to avoid falling into bidding wars. I used a unique dataset on auctions for a Playstation II game to provide an empirical assessment of the sniping theory. I do not find empirical support for this theory. Effects of competing and sequential auctions on bidders' behavior on eBay auctions. In most of the economic literature, online auctions are studied in isolation from each other. We study the effects of competing auctions that end at different times on Bidders' behavior. We use an original dataset of video games auctioned on eBay. Our main result shows that bidding activity tend to stop closer to the end of an auction when the difference between the closing times of that auction and the previous one is small. We also found that bidders facing competing auctions tend to bid in the first closing auction. These results suggest that late bidding in auctions with a hard stop time may not be equivalent to bidders waiting until the end of the auction to send their bids. We also found support for the idea that when facing competing auctions that end at similar times, bidders tend to bid at the auction with the lowest price. Our results also show that a bigger number of competing auctions reduces the final prices of the goods.

The impact of land subsidence on optimal inter-temporal use of groundwater is analyzed for a growing city where surface water is a feasible alternative and the goal is to maximize net social benefits. The problem is dynamic, since pumping and subsidence externalities increase costs in all future periods when groundwater is mined. It is also spatial because surface water costs increase with distance. The distance to which surface water is delivered is shown to depend on population densities, city size, and the proportion of surface water to groundwater use. The model is solved using dynamic programming and numerical techniques. Parameter values are chosen to simulate the case of Houston. The demand side is specified using consumer surplus from a Stone-Geary demand function, estimated with panel data. The simulation results confirm the analytical predictions that at first only groundwater is used and as demand grows, water levels go down and subsidence occurs. When the social marginal cost of groundwater reaches the marginal cost of surface water, it becomes optimal to use surface water. Because of increasing returns to scale in water treatment, surface water is used in large quantities right away. A period follows during which water levels increase and subsidence stops. Water levels start decreasing again when decreasing returns to dispersion dominate. Unless a water treatment plant is built in a different location, the use of groundwater keeps increasing and subsidence eventually resumes. The simulations indicate that if surface and groundwater have been used optimally in Houston, the discount rate must be low or subsidence costs are assumed very high. The recent reversal in water level declines is explained by increasing returns in treatment but because of increasing dispersion water levels should be allowed to drop again, as long as new treatment plants are built in different locations before subsidence resumes.

This thesis tests the premise that capital is perfectly mobile between countries and moves to the region of highest return. As a measure of capital mobility we use the correlation between saving and investment. Cross-country analyses by Feldstein and Horioka (1980) and Feldstein (1983) have shown high degrees of correlation between the variables implying that capital is immobile and savings remains in the home country. The earlier analysis is extended to more recent time-periods using cross-country data for 45 countries. Capital market rigidities are shown to persist into the 80's for industrialized countries. But developing countries show greater dependence on foreign funds. Analyses of individual countries exhibit the same dependence on own funds for industrial countries while developing countries have lower correlation coefficients between savings and investment. In general the results of this thesis confirm that while capital is internationally mobile barriers do exist to inhibit the flow.

A model, based in the current rent control legislation, of landlord's rent setting behavior is used to simulate rents that are then compared to an actual sample of rents from Mexico City. The paper assumes that landlords take into consideration the present value of future rent payments when setting new rents. This behavior nullifies the effects of rent control for the new tenant. Over a period of time tenants enter into a new contract and lose the benefits of the rent control law. The initial rents will be higher than what they would have been had there been no rent control. The main objective of the law, to reduce rents and to protect tenants against increases every year, is defeated after a period of time.