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Essays on the development of the American economy

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2009. / Includes bibliographical references. / The first essay analyzes the impact of the 1930's American Dust Bowl and investigates how much the short-term costs from erosion were mitigated by long-term adjustments. Exploiting new data collected to identify low, medium, and high erosion counties, estimates indicate that the Dust Bowl led to substantial immediate decreases in agricultural land values and revenues. Until at least the 1950's, however, there was limited reallocation of farmland away from activities that became relatively less productive due to erosion. Relative changes in agricultural land values and revenues indicate that the annualized long-term cost was 86% of the short-term cost to agriculture. Substantial out-migration reflects the large cost of the Dust Bowl, and was an important channel through which short-term costs were partly mitigated. The second essay examines the impact on agricultural development from the introduction of barbed wire fencing to the American Plains in the late 19th century. Farmers were required to construct fences to be entitled to compensation for damage by others' livestock. From 1880 to 1900, the introduction and universal adoption of barbed wire greatly reduced the cost of fences, relative to predominant wooden fences, most in counties with the least woodland. Over that period, counties with the least woodland experienced substantial relative increases in settlement, land improvement, land values, and the productivity and production share of crops most in need of protection. / (cont.) This increase in agricultural development appears partly to reflect farmers' increased ability to protect their land from encroachment. States' inability to protect this full bundle of property rights on the frontier, beyond providing formal land titles, might have otherwise restricted agricultural development. The third essay quantifies agglomeration spillovers by comparing the growth of total factor productivity (TFP) among incumbent plants in "winning" counties that attracted a large manufacturing plant to "losing" counties that were the plant's second choice. Five years after the opening, incumbent plants' TFP is 12% higher in winning counties. This effect is larger for plants with similar labor and technology pools as the new plant. We find evidence of increased wages in winning counties, indicating that profits increase by less than productivity. / by Richard A. Hornbeck. / Ph.D.

Identiferoai:union.ndltd.org:MIT/oai:dspace.mit.edu:1721.1/49707
Date January 2009
CreatorsHornbeck, Richard
ContributorsMichael Greenstone, Esther Duflo and Daron Acemoglu., Massachusetts Institute of Technology. Dept. of Economics., Massachusetts Institute of Technology. Dept. of Economics.
PublisherMassachusetts Institute of Technology
Source SetsM.I.T. Theses and Dissertation
LanguageEnglish
Detected LanguageEnglish
TypeThesis
Format188 p., application/pdf
RightsM.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission., http://dspace.mit.edu/handle/1721.1/7582

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