<p> This paper analyzes and characterizes the dynamics of wealth-share and equilibrium price in a stochastic general equilibrium model with heterogeneous consumers. The characterization enables a comparison between probabilistic learning and price evolution, revealing that prices incorporate "sparse" information efficiently. Results on wealth-share are obtained by comparing traders' optimal investment-consumption plans against their prices. This novel approach extends recent results in the literature by providing a condition that is necessary as well as sufficient for a trader to vanish. The results are applied to survival in iid, survival in large economies, and survival of traders that follow strategies commonly observed in real markets.</p>

<p>My dissertation contains three empirical studies on firm and demand behavior in the U.S. high-speed Internet market. The first study examines the question that the probability of new entry varies with the characteristics of markets in which an incumbent firm is able to offer mixed bundling. Empirical findings present low entry rates in markets with high income and more years of schooling, because these markets are associated with low likelihood of switching. As the federal government aims to increase high-speed Internet access, more competition led by a new entry can increase high-speed Internet penetration and encourage the competitive provision of advanced high-speed Internet service. </p><p> The second study focuses on the relationship between Internet privacy concerns and offline businesses. The growth of online shopping has raised concerns about online privacy protection, which may lead consumers to be more likely to shop at offline stores. Empirical evidence suggests that Internet privacy concerns are positively related to the number of offline businesses, such as bookstores and travel agencies and the growth of offline businesses in the retail trade and the finance and insurance industries. This can provide interesting policy implications for local economies. </p><p> The third study examines two competing explanations regarding the demand for online health services: locations of consumers and the opportunity cost of time. The former expects that the longer distance to hospitals increases rural residents' demand for online health service, whereas the latter takes into account the possibility that urban residents whose valuations of time are high have a high demand for these services. This study finds that the demand for online health services does not vary with the location of consumers or the opportunity cost of time. The federal government has expanded this service in rural areas, which may provide limited benefits to these communities. </p>

<p> The purpose of this dissertation is to advance the understanding of the impacts of trade and domestic policies on production, trade, welfare, and productivity. The first chapter summarizes and extends the New Empirical Industrial Organization (NEIO) literature by showing that the cost function specification plays a crucial role in identifying the market power parameter in both autarky and trade models. </p><p> The second chapter uses a strategic trade policy framework and the NEIO literature to analyze the oligopolistic competition between U.S. and Chinese apple exporters in the Association of Southeast Asian Nations (ASEAN) and in their domestic apple markets. A theoretical model is defined and quantitative results are derived for changes in ASEAN tariffs on imports of U.S. and Chinese apples and the latter countries' subsidies. A structural econometric model is estimated and simulated to quantify the effects of changes in the tariffs and subsidies on trade flows, price, and welfare. </p><p> The third paper develops a strategic trade model based on the new trade theory to analyze competition between Florida and S&atilde;o Paulo processors in the U.S. orange juice market and S&atilde;o Paulo processors in the European orange juice market. Comparative static results are derived to analyze the effect of a reduction in the U.S. and European tariffs on sales and welfare in the United States, S&atilde;o Paulo, and Europe. A structural econometric model is specified, and the NEIO literature is utilized to identify the market power parameters. The estimated structural model is simulated to quantify a reduction in the U.S. and European tariffs. </p><p> The fourth chapter analyzes the short- and long-run effects of various subsidies by developing a dynamic general equilibrium model with firm-level productivity shocks and endogenous entry and exit. Measurement statistics are specified for welfare, real gross domestic product, and total factor productivity to make the analysis resemble the data-based measurements macroeconomist typically implement. The model is calibrated to a general and widely accepted set of functional forms and parameters. The impacts of the elimination of subsidies are quantified by numerically solving the model for both steady state values and equilibrium transition paths for the above measurement statistics.</p>

<p> In order to adequately address problems associated with poverty, definitions and measurements of the issue must first be understood. This goal is complex, as both the definitions and measurement of poverty are subjective and vary geographically and categorically. The commonly used American poverty measure (i.e. the "poverty line") has recently received criticism because of its limitations as an absolute measure that fails to recognize the relative nature of poverty. Such criticisms have led to the development of alternate poverty measures. However, no single measure has the ability to account for all factors associated with poverty. As such, it is important to understand the strengths and weaknesses of various poverty metrics.</p><p> The aim of this study is to identify the benefits and limitations of several alternate poverty measures by examining each measure in relation to cultural and social indicators. In this study, several alternate poverty measures are identified and applied to the St. Louis Region. Principal component analysis and multiple linear regression techniques are used in conjunction with census data from the St. Louis metropolitan statistical area to identify the social and cultural factors that are concomitant to poverty as measured by each of the alternate poverty metrics. The poverty measures are then compared based on the significance of each identified concomitant. Additionally, alternate poverty metrics are compared through an examination of maps created to show variations in geographic distribution. The distribution of poverty is measured geographically for each alternate measure and subsequently standardized for meaningful comparison between measures by mapping the variance of distribution. </p>

This dissertation examines measurement problems caused by imperfect data and productivity issues in a microeconometric framework. The empirical work is done on a panel of 384 farmers in the Zona da Mata region of Minas Gerais, Brazil, for the period extending from 1979-84. The farmers use modern, labor and traditional inputs towards the production of two broad categories of outputs: crops and livestock. The first goal is to study estimation methods of agricultural input demand systems in the light of imperfect data and compare the consequences of not taking data quality into account versus when they are. These problems are addressed using techniques that include discrete choice models and virtual price methods. The second goal is to measure and examine the productivity of farmers and investigate the sources for existing variations in efficiencies. This is done using Stochastic Frontier Analysis methods and Data Envelopment Analysis. Besides the estimation of efficiency scores, investigating the effects of tenancy status and input-use on productivity are also addressed. The final goal is to link the above treatments empirically. This is done by examining the degree of misspecification that might arise from a failure to include the efficiency measures in the estimation of demand systems.

This thesis explores money manager intertemporal arbitrage as an explanation of the liquidity effect. We develop a theoretical model of optimal portfolio adjustment by professional money managers, and show that they engage in intertemporal asset price arbitrage; they reduce their holdings of financial assets when they expect asset prices to fall, and increase their holdings when they expect prices to rise. Since a reduction in financial assets can only be accomplished through an increase in money holdings, a connection exists between intertemporal price arbitrage and speculative balances. We show that in equilibrium, money manager behavior causes market liquidity shocks to be accompanied by a form of asset price overshooting in which asset prices first rise above their long-run value and then slowly return as speculative balances are lent out to borrowers and absorbed into transactions balances. Such asset price overshooting is precisely the liquidity effect, stated in terms of asset prices rather than interest rates. This shadows the result established by Hartley (1990), who showed that the combination of sector-specific liquidity shocks and trading rigidities across sectors will cause general price overshooting in those sectors closest to the money supply injection. The second part of this thesis attempts to identify an empirical relationship between speculative balances and asset prices as a means of verifying the hypothesis that money manager intertemporal price arbitrage generates the liquidity effect. It is not possible to estimate this relationship on an aggregate level because no means exist to identify speculative balances relative to the total money supply. However, it is possible to test if individual money managers engage in intertemporal price arbitrage. We do so by estimating individual institutional investor demand for speculative balances. The data source we use is the Flow of Funds, which gives money holdings for various groups of institutional investors. We find an elasticity of 0.1 for speculative balances with respect to the stock market price-earnings ratio.

This dissertation consists of two papers on international capital movements. The first part theoretically analyzes the macroeconomic effects of restrictions imposed by official authorities on foreign investment. The main result from the theoretical model is that restrictions on foreign investment by domestic residents can produce a source of cheap investment funds for domestic industries. This in turn would stimulate investment and domestic economic growth and could lead to a favorable judgment on the policy. However, economic welfare as measured by expected utility is reduced despite the high capital accumulation and increased economic growth. The second part of this dissertation examines the Japanese economy to see how closely its financial market has been connected to the world financial market and how well the theoretical model corresponds to reality. Japan is now well internationalized so far as some measures of internationalization are concerned: the volume of financial transactions, the correlation between domestic saving and domestic investment and covered interest parity. The empirical research also provides some evidence that financial services promote domestic production but an increase in net capital outflows retards its growth. However, it seems not to be clear how policy changes relating to international financial transactions affect physical capital accumulation.

Chapter one provides a new estimator for the ordered polychotomous model. The estimator is based on the use of the average of the standard normal densities with different means as a parametric approximation to the density of the error term. The method also, for the first time, provides a consistent, differentiable estimator of the distribution function of the error term. Chapter two employs the conventional interpretation of endogeneity in econometric models to develop a way of eliminating the inconsistency resulting from endogenous explanators in cross sectional models. The method first obtains an estimate of the unobserved heterogeneity responsible for the endogeneity and then creates a synthetic observation by taking a non-parametric weighted average of nearby observations. The deviations are produced from these synthetic means thereby eliminating the unobserved heterogeneity. The procedure is particularly useful for estimating models when the endogenous regressors are censored or appear non-linearly in the primary equation. Chapter three first calculates the exact distribution of Blum et al's (1961) statistic, which is based on a comparison of the sample joint CDF with the product of the sample marginal CDF's, for very small sample size and simulate the distribution quantiles of it for sample size not large enough to employ the asymptotic result. Secondly, the asymptotic distribution of the statistic constructed from residuals and/or predicted values, to test the independence of the error term and the regressors in nonlinear regression models, is obtained. Thirdly, bootstrap technique is used to obtain the distribution quantiles of the statistic constructed from residuals and/or predicted values. The test is nonparametric in that it does not specify the parametric form of distributions of the error term and the regressors.

This research analyzes the factors influencing choice and the determinants of women's health services demand. Demand for health services in Colombia is practically unexplored, and there appear to be no studies of demand for health services by women of child rearing age in Colombia. The Colombian National Health Study of 1980 (Estudio Nacional de Salud-1980) is the data base used, supplemented by hospital data from the Ministry of Health. After a description of the Colombian Health System, the choice between traditional and modern care is studied for prenatal care, and for child's delivery assistance, emphasizing differences among insured and non-insured women. The first part of the study estimates demand schedules through a logistic specification. The choice of institutional setting for child's delivery assistance, conditional upon the prior decision of using modern care, is studied through a nested multinomial logit specification for women in different regions of the country and for urban and rural women as well. Expected prices for a delivery are estimated for all choices women face. Only few recent studies have found demand for modern health services to be price elastic and dependent on income level; this is also the case in some of the regions of Colombia. Moreover, demand for health services becomes less price elastic as income increases. Demand for Private care is generally more price elastic than demand for other types of care, and in some cases demand for Public care is significantly price elastic at lower income levels. Lower income women rely on Public hospitals when they have decided against traditional care. Then, price changes for Public care would have larger welfare effects on lower income groups. Urban women of high income groups often use Public care, indicating that government subsidies are favoring better-off sectors of the population. Meanwhile, rural women rely heavily on home care, even at higher income levels. A more rational price system for services at social security hospitals would not reduce significantly women's welfare; higher prices would help to provide better quality services and/or permit cost recovery for those institutions which very often find themselves in financial trouble.

The main point of this paper is that politicians use the telecommunications industry as a tool for the implementation of social policy. In order to do this they need to control it. They control the industry by legislating the market as a monopoly. This means that politicians prohibit entry in this market. The usual justification behind this is that this market is a natural monopoly and it would be better to protect it. These arguments stand only for the case of a market which is a natural monopoly. In our historical analysis we found nothing to support the claim that the telecommunications industry is a natural monopoly. On the contrary, in any time, any place where competition was allowed it occurred. Moreover, it fostered both technological change and better service. In the case of Greece the telecommunications industry followed exactly this pattern. (Abstract shortened with permission of author.)