Agricultural & Resource Economics Theses and Dissertations
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Item SPATIAL EFFECTS OF LOCAL GOVERNANCE INSTITUTIONS ON ILLEGAL DEFORESTATION IN DEVELOPING COUNTRIES(2019) Kraus Elsin, Yoanna; Lichtenberg, Erik; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Deforestation worldwide is a major concern. In developing countries, it is a merciless and devastating reality. My thesis addresses how local governance institutions' strength influences this phenomenon, focusing on the Colombian Andes. The theoretical analysis examines spatial patterns of illegal deforestation when enforcement is costly, and costs rise with distance from governmental centers. Those spatial patterns depend on the interaction between transportation costs incurred by farmers growing crops on deforested land and enforcement costs incurred by government officials conducting on-the-ground monitoring of deforestation. Areas closer to governmental centers can be monitored effectively and are thus less subject to illegal deforestation. Illegal deforestation is, therefore, more likely in areas where monitoring costs are high, but farmers' transportation costs are not. The calibration exercise then shows, that in this context, patches of deforestation might arise within the forest, causing unwanted forest fragmentation. Based on these results I study empirically, first, if the effect of access difficulty on deforestation may be non-monotonic in accessibility, causing forest fragmentation; and second, if this fragmentation is more likely to occur when enforcement is more costly. I approach this question in two manners: (1) using a cubic function of access difficulty interacted with measures of enforcement capacity and (2) non-parametrically using indicators for discrete ranges of access difficulty, again interacted with measures of enforcement capacity. I construct for this purpose a panel data set for the Colombian Andes from a variety of sources. Data on deforestation comes from satellite imaging at a 30mx30m resolution in two periods (2000-2005) and (2005-2010), this data was matched with biophysical variables such as, altitude, slope, precipitation, soil type, and roads using geographical information systems (GIS), as well as with socioeconomic variables which vary by municipality and time. The regressions show a significant non-monotonic effect of access difficulty on deforestation. The evidence shows that deforestation probability first decreases with access difficulty, and it then increases in remoter places. This evidences forest fragmentation as one moves away from roads. Moreover, this pattern is affected by the fiscal performance index (a proxy for enforcement capacity) of the municipalities, showing that municipalities with lower enforcement capacity have a higher probability to present illegal deforestation at remote places. This research adds to the deforestation literature, by studying the spatial reach of governance capacity and how it affects deforestation patterns. The findings highlight the importance of taking enforcement and monitoring costs as well as their spatial variation into account when designing land-use policies and defining the institutional arrangements, funding and monitoring processes to implement them.Item ESSAYS ON ENVIRONMENTAL ECONOMICS: CARBON TAX, PRICE REGULATION AND RESIDENTIAL ELECTRICITY CONSUMPTION(2019) Wang, Jikun; Williams, Roberton; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation features three essays in environmental economics. In the first essay, I analyze how price regulation changes the welfare effects of carbon emission policies. Specifically this paper shows that electricity price regulation in China substantially increases the cost of reducing carbon emissions. I set up a simple general equilibrium model where the price of the carbon intensive sector (electricity) is regulated and examine the welfare impact of a revenue-neutral carbon tax. The model shows price regulation has a direct cost effect and also changes the secondary cost effects caused by pre-existing taxes. I then construct a static CGE model where the parameters are calibrated using stylized facts about the economy of China in 2007. My central estimate shows the marginal cost of achieving a 20% reduction in CO2 emissions is 22% higher in the presence of pre-existing taxes than in a world with only a carbon tax. Price regulation raises the marginal cost of CO2 reduction by a further 27%, on top of the distortion caused by pre-existing taxes. The second essay studies the implication of relaxing electricity price regulation, both in the context of pre-existing taxes and in the context of carbon pricing policy. It employs a general equilibrium model of the Chinese economy and provides ex-ante counterfactuals under a range of electricity regulation policy and assess the social welfare impact with potential electricity market reform. It shows pre-existing labor tax increases the per unit social benefit of deregulation. The analysis also shows carbon emission policy increases the per unit benefit of electricity deregulation compared with second-best setting. The third essay uses micro-level data in China to study the impact of urban heat island on residential electricity use (REU). Combining a household energy consumption survey in China with remote sensing data related to urban heat island intensity and weather conditions specific to each household, the empirical analysis shows that urban heat island has a significant effect on residential electricity use, through interacting with local weather conditions such as temperature. Higher urban heat island increases residential electricity consumption by increasing the impact of Degree Days on REU. The effect also varies seasonally and regionally.Item CASH, TRAINING OR COMMITMENT? EVIDENCE ON BEHAVIORAL AND FINANCIAL INTERVENTIONS FROM DEVELOPING COUNTRIES(2019) Bin Bakhtiar, Mohammed Mehrab; Leonard, Kenneth; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation analyzes how poor households in Africa and South Asia respond to large-scale policy experiments involving conditional and unconditional cash transfers as well as interventions that have training and behavioral components. The first chapter, titled “Do Cash Transfers Improve Women’s Agency? Evidence from Lab and Field Experiments", details results from lab-in-the-field experiments that I have designed and implemented for my PhD job market paper. This chapter investigates whether receiving a cash transfer - in a very low-empowerment context - improves women’s agency in household decision-making, particularly, in the longer term. I try to answer this question by combining data from a female-targeted unconditional cash transfer (UCT) program with lab- in-the-field experiments. The UCT was designed as a Randomized Controlled Trial and was disbursed to adult women from ultra-poor households in rural Nigeria over a period of 15 months. The lab-in-the-field experiments were carried out on 503 married couples one year after the UCT program ended and can measure women’s (as well as men’s) agency in household decision-making. The main experimental measure of agency is the propensity to not defer decision-making to one’s spouse. By randomly varying whether subjects’ decisions can be observed by their spouses, a latent desire for agency (in the absence of spousal observation) versus an actual manifestation of one’s agency (when decisions are observed by one’s spouse) can be separately measured. I find that UCT-receiving women, one year after the completion of the program, defer 13 percentage point fewer decisions to their spouses; however, they do so only when their decisions cannot be observed by their spouses. In the second chapter, titled “Social and Financial Incentives for Overcoming a Collective Action Problem: Sanitation Underinvestment in Rural Bangladesh", we study the effects of social and financial incentives on communities’ ability to overcome collective action problems. Our specific context is a sample of 107 villages (approximately 19,000 households) in rural Bangladesh, and the collective action problem we study is investment in hygienic latrines and their subsequent maintenance and use. We randomized (1) whether and what type of incentive was provided - a financial reward (which was, essentially, a conditional cash transfer) or a non-financial "social recognition" reward, and (2) whether and what type of verbal commitment the households were encouraged to make - a private pledge vs. a public pledge. We measure short-term (3 months) and medium-term (15 months) effects and investigate the mechanisms behind the effects. Preliminary reduced form estimates suggest that a small financial reward has the strongest impact in the short term, inducing an approximately 12 percentage point increase in hygienic latrine ownership relative to ‘control’ villages, which received basic health messages. The public commitment treatment, in which members would publicly commit to have a hygienic latrine at the end of a group meeting, induced an approximately 5 percentage point increase in hygienic latrine ownership in the short term. In the medium term the effect of the financial reward dissipates; however, the smaller effect of the public commitment treatment in the short term continues to persist after 15 months. The results suggest that low-cost interventions which take advantage of social network dynamics have the potential to improve the effectiveness of group-meeting based rural health interventions common in developing countries. The third chapter, titled “Training Mentors? Experimental Evidence from Female-Owned Microenterprises in Ethiopia" reports findings from a randomized evaluation of a business training and mentoring intervention targeted at female- owned microenterprises in Ethiopia shows that formal business training produces an immediate impact on the adoption of beneficial business practices (that were highlighted in the training); however, no impact on business profit is observed in the short term. Three and four years after the training, we observe delayed impacts on business profits. Shortly after the training, the trained cohort is randomly assigned to provide mentoring to less-experienced women who own smaller businesses. These mentees were nominated by mentors at baseline from their own social networks. The overall impact of mentoring on mentees is more muted. There are early impacts on the adoption of beneficial business practices, and some measures of profits. However, the impacts on profits do not persist in the longer term.Item Environmental Federalism: Chinese Governmental Behaviors in Pollution Regulations(2019) Yan, Youpei; Lichtenberg, Erik; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)China's economic growth has come with the cost of environmental deterioration. The economy has faced with many problems in land resource depletion and industrial pollution. I examine two policies that tackle three major environmental aspects on land, water, and air in China. All three chapters share the theme that devolution without enough oversights in environmental policies has lead to unintended consequences in practice, as local officials have their trade-offs to promote local economy and protect environment. The first chapter explores the local government's behavior in a land conservation program, which intends to reduce soil erosion by subsidizing afforestation of low productive farmland on steep slopes. Theoretically, the incentives created by the program combined with insufficient oversight have led to afforestation of highly productive farmland on level ground. With a unique land transition dataset, I show that this unintended land use effect has been substantial. This unexpected displacement of highly productive farmland represents a form of leakage that has not been fully explored in the literature. And it is problematic to a country with limited arable land relative to population size as it can negatively impact national food production targets and self-sufficiency goals. The second chapter investigates water pollution activities under China's Pollution Reduction Mandates. In response to the substantial environmental deterioration, the central government taxes firm emissions and subsidizes abatement technology installation. In theory, devolution to local governments to lower pollution and promote economic growth can create local incentives to allocate subsidies to effectively export pollution. I provide the first evidence of the magnitude of these distortions with unique firm-level pollution panel data and find evidence of water pollution exported to downstream and further away from local residences. A simulation indicates that the distortions created by local jurisdictional control harm the environment substantially: centralized allocation of subsidies could reduce total emissions by 20-30%. The third chapter keeps investigating the inter-jurisdictional pollution externalities on air pollution under the same mandates. It provides a complimentary evidence to show that local governments have incentives to promote spatial spillovers and free-ride on the downwind neighbors.Item MERGER EFFICIENCIES IN THE U.S. BOTTLED WATER INDUSTRY(2019) Zhang, Jun; Olson, Lars; Sweeting, Andrew; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation contributes to the literature concerning horizontal merger efficiencies and non-price competition in merger analysis. It focuses on the U.S. premium bottled water industry, where manufacturers face both price and non-price competitions. Chapter 1 gives an overview of this dissertation and chapter 2 to chapter 4 are three papers that the dissertation features. In chapter 2, I study the market power and marginal cost efficiency that was created following the merger of Coca-Cola and Glaceau in the U.S. premium bottled water market by assuming a vertical relationship between upstream manufactures and downstream retailers. In this framework, bottled water manufacturers are assumed to compete solely in prices and product attributes are exogenous. My supply-side model allows for a merger efficiency on Glaceau products by including an indicator for Glaceau products post-merger in the marginal cost function. With counterfactual simulations based on the demand and supply-side estimates, I show the merger has limited impacts on market power while marginal cost efficiency plays an important role in affecting the equilibrium prices and market shares post-merger. In chapter 3, I develop a conceptual framework by extending the vertical relation in chapter 2 to incorporate multi-dimension non-price competitions. This conceptual framework can be applied to consumer good industries with both price and non-price competitions. In this chapter, I provide a detailed description of model derivations, estimation strategies, and counterfactual simulations. In chapter 4, I apply the framework developed in chapter 3 to the merger of Coca-Cola and Glaceau and explore how horizontal merger efficiencies affect the equilibrium market outcomes considering both price and non-price competitions. To understand the underlying mechanisms that rationalize Glaceau's significant boosts in market shares, product varieties, and advertising expenditures post-merger, I estimate a structural demand and supply model where manufacturers choose wholesale prices, product varieties, and advertising, and I allow for several types of efficiencies on Glaceau. With counterfactual simulations, I show how marginal cost, product variety fixed cost, and advertising fixed cost efficiencies affect equilibrium market outcomes and consumer welfares.Item Essays on the Efficient Management of Water Resources(2019) Rosenberg, Andrew; Olson, Lars J; Newburn, David A; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In the first analysis of this dissertation, I assess the water use savings and cost-effectiveness of the Conservation Reserve Enhancement Program (CREP) in the Upper Arkansas River basin in Kansas, a water rights retirement program aimed at reducing depletion of the High Plains Aquifer. First, I use a fixed effects model with matched samples of farmers to determine the effect of CREP on water use. I find that for every unit of authorized water use retired in CREP, 0.8 units of water are saved per year. Second, I examine how a rights retirement program would perform outside of the policy region and how the existing program design could be improved upon. I estimate a probit regression to determine which factors most influence the probability that a farmer enrolls in CREP. Using the results of the probit regression, I then simulate enrollment decisions outside of the policy region to assess the cost-effectiveness of different incentive designs. I find that programs that pay incentives based on past levels of water extraction save water more cheaply than programs that pay based on acreage retired. I also find that programs such as CREP that offer higher incentive rates to farmers that enroll later are more efficient than programs that never increase rates. In the second analysis, coauthors and I assess the household value for stream restoration, a common approach used by local governments to mitigate the water quality impacts of urban stormwater. We conduct a choice experiment in the Baltimore metro region to examine household willingness to pay (WTP) for stream restoration. We vary the land ownership of restoration locations and the distance from households to streams in hypothetical choice scenarios that include changes in several stream restoration attributes. Our results indicate that household WTP for improvements in stream bank stabilization and nutrient reduction are positive and significant on public and private land across all distances. We find significant heterogeneity in WTP across land ownership and proximity to a stream. This heterogeneity in WTP can be of particular interest to policy makers when making decisions about where, and even how, to restore streams.Item ESSAYS ABOUT THE ELECTRICITY SECTOR IN CHINA(2019) Que, Guanghui; Alberini, Anna; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)China, with the largest electricity consumption market in the world, is in the process of market-oriented reform on its electricity industry and trying to encourage energy saving and enhance energy efficiency by implementing nonlinear pricing mechanisms. This thesis broadly investigates such policies through three related essays. The first essay investigates how Chinese households have responded to new nonlinear pricing schemes and estimates the price and income elasticities of demand. I use three complementary approaches. Based on an extensive household-level administrative dataset, I first perform a bunching test to see if consumers appear to be responding to non-linear pricing. Second, I estimate a double-log demand function using household-level consumption data during peak and off-peak time. I use instrumental variable techniques to address issues of endogeneity. Third, using survey data with extensive information about the stock of energy-using durables owned by households, combined with monthly usage records, I fit a structural model that includes time-of-use and increasing block rates pricing. I find evidence of remarkable heterogeneity in the price and income elasticities, depending on the stock of appliances, income level, and total electricity consumption. This provides support for the notion that increasing block rates give stronger incentives to households with higher consumption levels. Policy simulations under two alternative scenarios show that households do decrease their total electricity consumption significantly when the pricing schemes change from uniform pricing to non-linear pricing such as time-of-use pricing and increasing block rates. The second essay investigates the vertical integration economies between transmission and distribution of the electricity industry. Using unique administrative cost data of 24 province utility companies in China, I first estimate a quadratic cost function. To investigate the vertical integration economies thoroughly, I define transmission and distribution based on three counterfactual scenarios, treating the 220kV and above network, 110kV and above network, 35kV and above network as transmission under the first, second, and third scenarios respectively. Then I estimate the vertical integration economies under these three scenarios. Results show that there do exist significant vertical integration economies and that the vertical integration economies have grown over time. I also find evidence of remarkable heterogeneity in the vertical integration economies. Utility companies with high consumption intensity have larger vertical integration economies. Also, vertical integration economies are larger under the first scenario than the second and third scenarios. All these results support the conclusion that currently, the separation of transmission and distribution would cause significant cost increase, which will be transferred to end consumers. The third essay investigates how stock prices of generation companies and major industrial electricity users react to the electricity on-grid and retail tariff adjustments and announcements of future market-oriented reform plans in China using the event-study method. Attention is restricted to publicly listed generation companies and major industrial electricity users. Using two different windows periods (5 business days before and after the events, the short-term, and 10 business days before and after the events, the mid-term), I find that stock prices do not respond significantly to the announced future reform plans. This may betray the consumer’s belief that future reform plans will not be implemented effectively and thoroughly in China. By contrast, the stock prices of generation companies and major electricity consumers do react significantly and negatively to tariff adjustments in both the short- and the mid-term.Item Higher education, human capital spillovers and economic growth(2019) Qi, Yuandong; Leonard, Kenneth; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Many theorists suggest that the concentration of human capital in a region helps improve productivity for firms and individuals by creating social learning chances for workers. Such human capital spillovers can generate innovations and new ideas which are the driving forces for sustainable long-term growth. My dissertation provides systematic empirical evidence for human capital spillovers using micro-level data from China. In chapter 1, I provide motivation, a discussion of identification challenges, a literature review on human capital spillovers, a description of the data used in my dissertation, a description of the Chinese economy, and a preview of my identification strategies and findings. In chapter 2, I investigate the effect of aggregate human capital on productivity in an indirect way. I compare the wages of otherwise similar individuals that live in cities with different level of college share. The resulting estimates indicate that workers working in cities with higher human capital do have higher wages than otherwise similar workers in cities with lower human capital. Interestingly, I find that both skilled and unskilled workers benefit from the increase in human capital, but unskilled workers benefit more than skilled workers. This is may be due to imperfect substitution between skilled and unskilled workers. In chapter 3, I take a constant-composition approach, which in theory sepa- rates imperfect substitution effect from spillovers by holding the skill composition in the workforce constant, to further investigate the existence and magnitude of human capital spillovers. The results show that the relationship between workers’ wages and city-level human capital remains positive and statistically significant. The es- timates from individual wage data indicate that a one percentage point increase in the share of college-educated workers in the population is associated with a 1.4 to 3.6 percent increase in wages. In chapter 4, I take a direct approach to estimate the impact of aggregate human capital on productivity. Specifically, I apply a first differenced instrumental variable model to a balanced firm panel data to study the impact of an increase in the share of college-educated workers on firms’ total factor productivity (TFP). I find that one percentage point increase in college share in a city increases firms’ TFP by 0.8 to 2.1 percent. Private firms are more responsive to overall human capital than state firms, and the human capital spillovers are stronger in denser and larger cities. Chapter 5 concludes.Item THE LITTLE PUSH: ROLE OF INCENTIVES IN DETERMINING HOUSEHOLD BEHAVIOUR IN INDIA(2018) Balakrishnan, Uttara; Jakiela, Pamela; Leonard, Kenneth; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)A substantial proportion of households in India suer from multiple deprivations - low income, poor health, low education levels and poor housing conditions. Additionally, gender biases arising out of cultural norms disadvantage women even more. Programs that transfer cash to households are one way of attempting to break the cycle of poverty and gender bias. In my dissertation I study the impacts of three dierent cash transfer programs in India that specically target the rural poor and attempt to either change behaviours directly or impact education and health as unintended consequences. In my rst chapter, I hypothesize that a crucial determinant of son preference in Indian households is the high future costs of raising girls which arise from cultural traditions such as dowry payments at the time of marriage and impost a huge economic burden on households. I explore the role of future costs in determining son preference through the evaluation of a government program that was implemented in one state in India which gave incentives to couples to give birth to girls. I empirically show that an exogenous change in these future costs can have dramatic positive implications for fertility and sex-selective abortion behavior on the one hand, as well as positively impacting dierential investment allocation within the household on the other. In my second essay, I examine whether provision of free rural health insurance in a developing country enables households to cope with health shocks by examining impacts on labour supply of individual household members. I nd that, while men and women, both are increasingly likely to spend more hours per week on the labour market, the increase in labour supply for women is much steeper. I provide evidence that the program acts through two channels: a reduction in time spent at home for women in caregiving tasks and a reduction in time spent being unable to work due to major morbidities. Finally, in my third chapter, I examine if a public works program in India, that guaranteed employment to rural households, helps ameliorate the impacts of a negative agricultural productivity shock on child health.Item Essays on the Effects of Air Pollution on Human Health(2018) Ruiz-Tagle, Juan Cristobal; Williams, Roberton C; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)According to recent reports by The World Bank and the World Health Organization millions of people die every year because of exposure to ambient air pollution—the vast majority of them in developing countries (World Bank 2016; World Health Organization 2016). Policy makers throughout the developing world are starting to seriously address this issue by designing and implementing a battery of policies for reducing ambient air pollution. To weight the cost and benefits of these policies policy makers need estimates of the benefits of reducing ambient air pollution. In this dissertation I provide estimates of the benefits of air pollution reduction in terms of its effects on human health. I use data from Chile, a middle income country that in recent years experienced a period of rapid industrialization and economic growth—similar to the process that many developing economies are experiencing these days. I believe that estimates and methods from this dissertation can provide a valuable tool to aid policy makers in the developing world in their goals to reduce ambient air pollution. Chapter 1 examines the effects of exposure to ambient air pollution on infant mortality. Using state-of-the art techniques to identify causal effects and reduce possible bias due to measurement error in air pollution exposure, results from this chapter show significant effects of exposure to ambient air pollution on infant mortality. This effect is larger for infant mortality due to respiratory and cardiovascular diseases. Chapter 2 examines the effect of exposure to ambient air pollution on urgent care visits for different age groups and across different types of urgent care visits. Using a novel strategy to identify causal effects, results from this chapter show a significant effect on respiratory urgent care visits and on cardiovascular and circulatory urgent care visits. This effect is larger for the elderly and for respiratory urgent care visits due to pneumonia and lower respiratory diseases. Chapter 3 examines the effect of exposure to ambient air pollution on the probability of a pregnancy ending in a stillbirth delivery. Results from this chapter show a significant effect of acute exposure to air pollution on the probability of stillbirth delivery. This effect is larger for those stillbirths that are due to hypoxia.