<p> These three essays investigate three different cases where na&iuml;ve good intentions &ndash; policy or econometric &ndash; actually lead to suboptimal policy or measurement outcomes. </p><p> In the first chapter, James Hilger and I investigate bias in the commercial passenger fishing vessel (CPFV) industry when a na&iuml;ve researcher estimates willingness to pay estimates (WTP), derived from random utility models (RUM), in the context of vessel sellouts. Using incorrectly estimated WTP measures may lead to undervaluation of natural resources. </p><p> In the second essay, Richard Carson, Melissa Famulari, and I simulate a university with a benevolent higher level administrator who wants to keep per-student funding roughly the same, or same with adjustment for preferences, across the university in a CES-style fashion. If students also prefer to major in departments with high per-student funding, these two goals are in conflict and necessitate the higher-level administrator to lower per-student funding for popular departments. Using data from UCSD, we find that departments with large numbers of students are less expensive per degree, have higher modified student-to-faculty ratios, and graduate students sooner than other departments. </p><p> In the third essay, I investigate the transition from methyl tertiary-buthyl ether- (MTBE-) enhanced to ethanol-enhanced (E-10) fuel in the Northeastern United States. Using a complicated set of phase-ins and phase-outs, I use difference-in-difference estimation to show that ambient acetaldehyde pollution substantially increased in percentage terms because of E-10 -- although this is a small level increase, since the level of acetaldehyde is low in the area. Using a stylized calculation based on cancer risk still shows damages of this pollution are levels of magnitude lower than the billion dollar water pollution cleanup costs from MTBE additive.</p>

The first essay of this dissertation explores the role of congressional politics in environmental law enforcements in the United States. It examines if and to what extent the political affiliation of a representative politician matters for the enforcement of the Clean Air Act (CAA); in particular whether the affiliation of a representative politician to a particular party results in a higher/lower level of enforcement in his/her constituency. The period of 1989 to 2005 is considered. The analysis shows that political processes at the local, state and federal level did matter for facility level enforcements. By and large, the Republican politicians tended to reduce facility level inspections compared to their Democrat counterparts and the magnitude of such reduction marginally increased with the seniority of the Republican politicians----a finding that has important policy implications. As a result the political affiliation of a politician emerges as a key instrument for environmental enforcement in the emissions equation.The second essay studies the potential issue of contagion in individual honesty (or, dishonesty). When an individual believes that peers are predominantly untruthful (or, truthful) in a given situation, is he/she more likely to be untruthful (or, truthful) in that situation in absence of monitoring, social sanction and reputation formation? The analysis employs an asymmetric information deception game patterned after Gneezy (2005) and reaches at the conclusion that individuals are heavily (partly) contagious when they believe that peers are predominantly dishonest (honest). The conclusion sheds some light on one of the many individual level root causes as to why the world is bipolar in the distribution of corruption (with most countries are either highly corrupt or highly honest).The third essay discusses the complementarity that existed between the diffusion of motor vehicles usage and the construction of the network of roads in the United States during the first half of the twentieth century. With the expansion of roads, communication between two destinations became smoother, faster and more convenient and in turn attracted more and more people to use motor vehicles as a medium of communication. We empirically investigate how the expansion of the network of roads resulted in the diffusion of motor vehicles. We plan to empirically explore the impact of the diffusion of motor vehicles usage on the expansion of the road network in our future work. The complementarity that existed between the diffusion of motor vehicles and the expansion of roads in the United States in the first half of the twentieth century has important policy implications for today's developing countries that do not have a well constructed network of roads.

<p> Anthropogenically introduced nitrogen has compromised environmental quality, but is an essential element for crop production, particularly corn production. Increasing nitrogen use efficiency by adopting eco-innovations such as nitrogen soil testing, plant tissue testing and nitrogen transformation inhibitors can ameliorate this problem. Data from the 2010 USDA Agricultural Resource Management Survey of corn producers was used to examine the factors affecting adoption of these practices. Twenty-one percent of the 1840 corn farmers had adopted nitrogen soil testing, three percent had adopted plant tissue testing and ten percent had adopted nitrogen inhibitors. A multivariate probit regression found significant results for each category of explanatory variable that was examined. Older farmers were less likely to adopt nitrogen soil testing and nitrogen inhibitors. Farmers who did not obtain external nitrogen recommendations were less likely to adopt all three practices than farmers who received recommendations from a crop consultant. Those who received recommendations from fertilizer dealers were less likely to adopt nitrogen soil testing. Those who indicated that high prices influenced their decision to plant corn on that field were more likely to adopt plant tissue testing but less likely to adopt the other two practices. All regions were more likely to adopt nitrogen soil testing than the Midwest. Those who adopted conservation tillage were more likely to adopt nitrogen inhibitors and those who received conservation payments were more likely to adopt nitrogen soil testing and plant tissue testing. Adoption was also associated with the adoption of several other technologies.</p>

No description available.

This dissertation consists of two independent studies. The first study belongs to the field of environmental economics and the second is on international trade, with a focus on offshoring. In the first study, we investigate firm investment in advanced abatement technology under a heterogeneous firms framework. In contrast to existing literature, we find that the optimal level of investment in advanced abatement technology is an inverted U-shaped function of firm productivity. More-productive firms have superior environmental performance, in the sense that they have lower emission per unit of output. Comparative statics shows that in response to a tighter environmental regulation, more-productive firms tend to raise their investment in advanced abatement technology while less-productive firms do the opposite. Key theoretical predictions are confirmed by Chinese data. The second study analyzes the decision of a multinational firm from a developed country to slice a production chain to allocate different tasks of the production chain globally. The process involves a wide range of tasks that varies from very routine jobs to very research and development (R&D) intensive work. We find that under certain conditions, a drop in offshoring costs (1) leads to more slicing (an increase in the length of production chain) and more offshoring, (2) stimulates R&D, and (3) raises employment in the developed country. / published_or_final_version / Economics and Finance / Doctoral / Doctor of Philosophy

This dissertation comprises three essays under the title "Three Essays on Trade, Resource and Environment". / The first essay develops a model of international duopoly involving competition both in prices and in levels of environmental friendliness, and studies the implications of government policies. It is shown that, contrary to the conventional wisdom, a regulatory increase in the minimum required level of environmental friendliness of the imported goods may harm the home firm, and may result in an increase in the volume of imports. It may also have adverse effects on the environment. Whether consumers lose or gain from such a regulatory increase depends on consumption spillover effects. We also show that, under certain conditions, the duopoly's equilibrium choice of levels of environmental friendliness is socially optimal. / The second essay investigates the properties of the dynamics of population and resource in a model where the objective function is to maximize the utility level of the least advantaged generation. Unlike in models with a utilitarian objective where the typical outcome is a unique steady state, it is found in our model that there is a continuum of steady states. Which steady state will be approached depends on the initial conditions. We show that for relatively large values of the resource stock, each steady state is conditionally stable in the saddlepoint sense; but for small values of the resource stock, the approach path to a steady state is non-monotone in the state space. Along the approach path to a steady state, the implicit discount rate varies over time. / The third essay extends the existing literature on regulation of polluting firms by taking into account the dynamics of investment in pollution abatement capital. It confirms that, under perfect competition, a Pigouvian tax can create the correct incentive for firms to invest and guide firms to achieve the social optimum. This tax path is time consistent. However, when there is a large polluter with price taking behavior, while an efficient and time consistent tax path exists, it is no longer subgame perfect unless the damage cost function is linear in emission. A non-linear taxation rule needs to be designed to achieve the socially optimal outcome. In the case of monopoly, a pair of instruments, an emission tax and a production subsidy, can lead the monopolist to achieve the social optimum. However, if pre-commitment is not possible, it is shown that linear feedback rules cannot achieve the first best outcome.

<p>N/A</p> / Dissertation

<p> This dissertation explores motivations behind setting voluntary greenhouse gas (GHG) emission reduction goals. It seeks to understand how the institutional environment in which firms operate shape their profit-maximizing decisions regarding GHG emissions. Such an environment is populated by various stakeholder groups that exert influence on the firm. Understanding how such groups impact the firm can (1) inform policies that take advantage of institutional arrangements to encourage more aggressive emissions reductions by firms and (2) demonstrate the limits of voluntary approaches in reducing GHG emissions. </p><p> The first essay develops a theoretical framework in which corporate social responsibility (CSR) related to climate change is modeled as the proportion of clean inputs firms use in their production processes. Stakeholder groups can have preferences for environmental CSR that impact a firm's profit function and constraints. The resulting framework demonstrates the various considerations that a firm may have in deciding on a profit-maximizing level of environmental CSR given various characteristics. </p><p> The second essay delves more deeply into the decision making process within the firm as it develops a strategic response to the issue of climate change. This is done by analyzing 17 interviews conducted with experts on environmental sustainability efforts in large firms. These suggest that companies may be prompted to respond to the issue of climate change by pressure from different groups, but cost considerations shape the degree of that response. Reduction goals often encourage innovation at the firms as they examine their production process with the dual objectives of reducing costs and emissions. </p><p> The third essay explores the characteristics of firms that joined the U.S. Environmental Protection Agency's Climate Leaders program, a voluntary program through which member firms set and achieved GHG emissions reductions from 2002 to 2010. A panel of the S&P; 500 members from 2002, 87 of which eventually joined Climate Leaders, is analyzed using a panel probit model and survival analysis. Results suggest that firms already engaged in sustainability activities were more likely to join the program. Additionally, larger firms, those located in more environmentally friendly states, and those located in areas with cleaner air are more likely to be in the program.</p>

This thesis studies the interaction between the environmental regulations/ agreements and international trade. I investigate and verify pollution haven hypothesis with panel regression with industries and country level data. The pollution haven hypothesis states that stringent environmental policies may drive the dirty industries to the countries with less stringent regulations. This paper verifies the pollution haven hypothesis from three aspects. Imports will increase for European Union Emission Trading Scheme (EU ETS) members for dirty industries while exports decrease. Both the inward and outward foreign direct investments of dirty industries decrease for EU ETS countries. In the last chapter, I consider all types of multilateral environmental agreements and show that the presences of multilateral environmental agreements decrease countries total trade volume.

<p>Environmental goods such as clean air and water are integral to human quality of life. However, because these amenities are not priced, their monetary values are not directly apparent. As a result, Hedonic methods have been employed as a tool to recover household Marginal Willingness To Pay (MWTP) for these goods to inform policy-making given constrained public resources. This thesis consists of three chapters tied to the Hedonic valuation of a particular environmental `bad,' a brownfield site. Brownfield properties are lands that cannot be used due to the presence of a low-risk, hazardous substance. </p><p>The first chapter uses property value hedonics to reveal household willingness to pay for brownfield cleanup (joint work with Kevin Haninger and Christopher Timmins). We exploit variation in space and time to deal with the potential bias in estimating MWTP due to unobservable variables that are correlated with both housing prices and site cleanup. Furthermore, there has been recent work showing that if equilibrium price functions change over time, the capitalization of changes in neighborhood amenities into property values over time (e.g. brownfield cleanup) may neither represent the preferences of those living in the neighborhood before changes occurred or after. To address this, we provide a way to estimate cleanup without assuming that the hedonic price function is stable over time, an assumption that would likely be violated if site cleanup brought about significant changes to the community populations around the sites.</p><p>The second chapter considers two sources of distortions in the valuation of non-marketed goods - an expectations bias and a learning bias. If consumers suspect that cleanup of a brownfield is likely before it is cleaned (expectation) or gain new information about the severity of the brownfield contamination (information), then baseline period prices need to be adjusted to account for these potential distortions to the MWTP estimate. To address this, I collect a new data set on brownfield contamination information over time from Massachusetts, and recover hedonic values from a dynamic neighborhood choice framework that allows agents to learn about brownfield hazards in a Bayesian fashion. I find a MWTP estimate of \$888.38 per unit of site contamination when accounting for learning and forward-looking behavior, which is more than double the simple hedonic estimate. Furthermore, parameters from my model can be used to calculate the average value of information provided by a site assessment.</p><p>The final chapter, joint work with Gabrielle Inder, examines whether different types of information about brownfield contamination capitalize into property values differently. More specifically, we estimate a property value hedonic model to test if housing prices are impacted differently if information about nearby contamination is released as a continuous measure as opposed to a binary measure (i.e. exceeding a threshold value or not). We do this by exploiting variation in contaminant thresholds used, holding constant the contaminant level, due to regulatory requirements for brownfield investigations in the State of Massachusetts. As the variation in threshold levels are tied to the level of human exposure of the areas in which these contaminated sites exist, threshold exceedance is potentially endogenous to unobserved neighborhood characteristics that also impact housing values. To deal with this, we take an Instrumental Variables approach using variation in threshold exceedance due to the location of underground water sources. After instrumenting for threshold exceedance with the presence of an aquifer underground, our estimates indicate a 10\% decrease in housing values from exceeding contaminant thresholds, but that continuous toxicity levels have a negative but insignificant effect. These findings suggest that polices aimed to improve public awareness about pollution should be cognizant of how information is conveyed, as it may allow for better design of information provision programs aimed to improve environmental quality.</p> / Dissertation