Agricultural & Resource Economics Theses and Dissertations
Permanent URI for this collectionhttp://hdl.handle.net/1903/2739
Browse
7 results
Search Results
Item Market Structure and Congestion Externalities: Theory and application to the ride-hailing industry(2021) Gomez Gelvez, Julian Andres; Williams III, Roberton C; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)The encompassing theme of this dissertation is the analysis of markets that feature market power and negative externalities. I focus mainly on congestion externalities, as externalities that affect only market participants. The first chapter evaluates the efficiency of private pricing of congestible resources. I develop a model of congestible resource use that explicitly considers a bivariate distribution of reservation values and sensitivities to congestion across potential users. This model highlights the importance of the correlation between reservation values and sensitivities to congestion to judge the efficiency of private pricing. Numerical results based on a road pricing example show that monopolistic pricing can range from very inefficient (price too high) when the correlation is negative to almost complete efficiency when it is strong and positive. The second chapter studies ride-hailing markets mediated by digital platforms like Uber. I extend the model of the first chapter to include a supply side of drivers. A monopolistic platform chooses prices on both sides of the market to maximize profit. I calibrate the model to the morning peak period of Bogota, Colombia. The results show that the price gap imposed by a monopolistic platform corresponds to about two thirds of the net marginal external cost caused by an additional ride hailer. A congestion charge on ride hailing is then justified. However, the optimal congestioncharge, as a tax on the price charged to riders, covers only 50% of the marginal external cost. The last chapter explores the effects of modifying several assumptions of the ride-hailing model developed in the second chapter. The main modification is to move from a monopolistic market structure to a duopoly. I show that absent any differentiation between platforms, competition leads to zero profits. This result supports the idea that ride-hailing markets gravitate towards a single platform. Assuming a small amount of differentiation, the duopoly equilibrium reduces the price charged to riders and increases the size of the market. This expansion reduces overall welfare due to the external effect on traffic congestion and calls for a higher congestion charge.Item Essays on transportation and environment in China(2021) Shen, Chang; Alberini, Anna; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)My dissertation focuses on environmental issues associated with the transportation sector in China. The automobile industry in China has grown exponentially in the past 20 years. The rapid growth poses enormous challenges for the reduction of CO2 emissions and pollution. My dissertation utilizes a variety of data sources and explores what policies and market incentives can effectively promote greener transportation and reduce GHG emissions and pollution.In my first chapter, I investigate how Chinese consumers value fuel economy. Understanding this is central to determining what is the optimal policy for reducing vehicle emissions under current policy environments. I find that the new vehicle market displays full valuation, ranging from 85-105% under different specifications and assumptions. Consumer accessibility to reliable fuel economy information has a positive impact on the valuation ratio. The high valuation of fuel economy suggests that a gasoline tax or carbon tax could be an efficient tool in reducing greenhouse gas emissions for China. In my second chapter, which I co-authored with Professor Joshua Linn, I look at how rapidly rising income contributes to exploding vehicle demand in China, and how we can use this knowledge to better forecast future GHG emissions. We estimate an elasticity of new car sales to income of about 2.6. This estimate indicates that recent projections of vehicle sales in China have understated actual sales by 40 percent. In my third chapter, instead of looking at GHG emissions, I look at pollution from high-emission trucks. I evaluate how a ban on these trucks improves local NO2 levels in Beijing. The result suggests that the policy helped reduce NO2 by 1.26 μg/m3, or approximately 2.6% of the NO2 level. Additionally, it was found that stations located in areas with a high density of major roads, fewer natural surroundings, and more buildings saw a more significant policy effect than their counterparts.Item Regulation, Market and Technology: Evidence From the U.S. Trucking Industry(2017) He, Zheng; Houde, Sébastien; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)My dissertation focuses on the environmental regulations in the trucking industry and their impacts in the United States. I explore the causal effects of environmental policies on trucking decisions, the technological challenges of reducing fuel consumption and the optimal fuel taxes to account for the externalities of trucking operation. As the fuel economy standards for medium- and heavy-duty trucks are finalized in August 2016, my dissertation addresses a timely and important issue -- how to effectively reduce greenhouse gases emissions from trucking operation. Three essential policy tools are examined -- taxes, fuel economy standards, and engine replacement schedule. In the first essay, I exploit a rich vehicle-level micro dataset of the U.S. heavy-duty trucking fleets to examine how truckers respond to changes in per-mile fuel cost. Per-mile fuel cost depends on the fuel economy of the vehicle and on the price of diesel, which is taxed at a different rate than other motor fuels. The U.S. Environmental Protection Agency (EPA) categorizes medium- and heavy-duty trucks into two groups - combination trucks and vocational vehicles. They are regulated separately due to their distinctive driving patterns and trip distances. Combination trucks are tractor-trailers weighing more than 26,000 pounds, typically with a body type of either an enclosed box or a platform. They are mostly used for long-haul shipping. Vocational vehicles are straight trucks (with a loading area as part of the vehicle) with gross vehicle weight greater than 10,000 pounds. They travel locally for various professional purposes and include step vans, dump trucks, concrete mixers, etc. My empirical results show that the average medium-run elasticities of vehicle-miles-traveled are -0.23 for combination trucks and -0.27 for vocational vehicles; the average elasticities of payload distance are -0.43 for combination trucks and -0.36 for vocational vehicles. Within each of the two groups, the estimated elasticities vary significantly among different truck weight classes and business sectors. The heterogeneity in truckers' responsiveness calls for differentiated policies, particularly in fuel taxes. I derive the optimal fuel taxes in a general equilibrium model that includes the externalities of truck operation (such as air pollution, road damage, accidents, and noise pollution), measures shipping demand in terms of payload distance and allows truckers to choose their routes based on shipping demand. In the second-best setting, most of the optimally differentiated diesel taxes are about twice or three times the actual rate. Compared to the optimal uniform tax, implementing differentiated taxes based on vehicle weight classes reduces the existing distortion and generates an overall welfare gain of about 17.5 billion US dollars per annum. In the second essay, I look at the evidence about fuel economy and other truck attributes from the U.S. Vehicle Inventory and Use Survey (VIUS). I estimate the trade-off effects between fuel economy and truck attributes, providing implications for a dynamic baseline of improvements in fuel economy. My estimation results show that the annual rates of fuel economy improvement from 1973 to 2002 are about 0.93% for combination trucks and 0.83% for vocational vehicles. In other words, in the absence of regulations, we can expect reductions in fuel consumption by 8.01% for combination trucks and 7.15% for vocational vehicles in ten years, just under half of the targets. The difference in technological progress among fleets with various sizes suggests that incentivizing trucking fleets to update their vehicles more frequently can be an effective channel to improve overall on-road in-use trucks' fuel economy. In the third essay, I examine the industry responses to the California Statewide Truck and Bus Regulation -- a schedule for truckers to retrofit or replace their vehicles -- using two empirical approaches. First, the arbitrary choice of the cutoff year allows me to conduct a regression discontinuity design. I find a 71.4% reduction in the population of targeted truck group as the deadline approaches. Second, I compare the targeted group with trucks having similar body types but different model years and investigate the effect in a difference-in-difference framework. Once the natural business-as-usual rate of replacement is accounted for, the estimated reduction in truck population due to the regulation drops to 57.8%. Using this estimate and necessary assumptions, I also back out the proportion of trucks registered in NOx-exempt counties that are solely operated within these counties.Item Behavioral Response to Environmental Taxation: Evidence from the Transportation Sector(2016) Cerruti, Davide; Alberini, Anna; Williams III, Roberton; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation analyzes how individuals respond to the introduction of taxation aimed to reduce vehicle pollution, greenhouse gases and traffic. The first chapter analyzes a vehicle registration tax based on emissions of carbon dioxide (CO2), a major greenhouse gas, adopted in the UK in 2001 and subject to major changes in the following years. I identify the impact of the policy on new vehicle registrations and carbon emissions, compared to alternative measures. Results show that consumers respond to the tax by purchasing cleaner cars, but a carbon tax generating the same revenue would further reduce carbon emissions. The second chapter looks at a pollution charge (polluting vehicles pay to enter the city) and a congestion charge (all vehicles pay) adopted in 2008 and 2011 in Milan, Italy, and how they affected the concentration of nitrogen dioxides (NOx). I use data from pollution monitoring stations to measure the change between areas adopting the tax and other areas. Results show that in the first quarter of their introduction, both policies decreased NOx concentration in a range of -8% and -5%, but the effect declines over time, especially in the case of the pollution charge. The third chapter examines a trial conducted in 2005 in the Seattle, WA, area, in which vehicle trips by 276 volunteer households were recorded with a GPS device installed in their vehicles. Households received a monetary endowment which they used to pay a toll for each mile traveled: the toll varied with the time of the day, the day of the week and the type of road used. Using information on driving behavior, I show that in the first week a $0.10 toll per mile reduces the number of miles driven by around 7%, but the effect lasts only few weeks at most. The effect is mainly driven by a reduction in highway miles during trips from work to home, and it is strongly influenced by past driving behavior, income, the size of the initial endowment and the number of children in the household.Item THE INTERACTION BETWEEN DISTANCE TO WORK AND VEHICLE MILES TRAVELED(2008-01-31) Gonzalez, Hernan Mauricio; Horowitz, John K.; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Economists have long been concerned with the externalities generated by automobiles, such as traffic congestion and air pollution. Since many of these externalities are closely bound up with the number of miles being driven, economists have been much interested in the behavior of what is known as vehicle miles traveled (VMT). Planners believe that land use can be manipulated to serve congestion management, air quality or related transport planning goals. The underlying idea is that household location may have a big impact on its transportation demand, including car ownership. In this context, I focus on distance to work (DTW) as the measure of household location. I chose a continuous measure of household location instead of a discrete one because, besides being easily measured, it matches better the data available for this study and it has a very straightforward interpretation--it allows me to calculate the contribution of commuting miles to total miles driven. Despite the clear conceptual connection between DTW and VMT, and the constraining nature of household location, little is known about their joint behavior. City and household level attributes that may lead households to live close or far from their work may also lead them to drive few or many miles for non-commuting purposes. This effect must be accounted for when measuring the behavior of VMT conditional on DTW. I develop two models to analyze: (i) the role of city characteristics in explaining households' distance to work, (ii) the effect of distance to work on VMT and car ownership, (iii) the effect of city level attributes on VMT, conditional on DTW, (iv) the unobserved taste for driving, (v) differences between workers and non-workers. I find that: (i) City characteristics expected to affect commutes have a small effect on households' DTW, (ii) DTW provides an important effect on car ownership levels and VMT, (iii) City characteristics expected to influence non-commute miles have a small impact on VMT, (iv) taste for driving has a small but significant effect on VMT, and (v) non-workers are much less responsive to gas prices than workers.Item The Value of Mortality Risk Reductions in Delhi, India(2006-11-27) Bhattacharya, Soma; Alberini, Anna; Cropper, Maureen L; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Road accidents kill nearly 1.2 million people each year worldwide, two-thirds of whom live in developing countries. Traffic crashes may indeed become the third leading cause of death in developing countries by the year 2020 (Murray and Lopez, 1996). For governments in developing countries to make informed decisions about investments in traffic safety, it is imperative that the benefits of road traffic improvements be monetized and compared with costs. This, however, requires estimates of the value of reductions in risk of death. The goal of the dissertation is to provide estimates of the value of mortality risk reductions in a traffic safety context in Delhi, India. To estimate the value of road safety improvements in Delhi requires understanding the nature of developing country traffic risks. Methods of valuing traffic fatalities used in high-income countries based on seatbelt use or purchase of safer cars are not applicable here. In my survey I asked 1200 commuters what they would pay to reduce their own risk of dying as a (a) pedestrian, (b) driver of a two-wheeler, and (c) commuter, regardless of travel mode. These scenarios mirror the bulk of fatal accidents in Delhi. I find that mean WTP for mortality risk reduction increases with the size of risk reduction, as predicted by economic theory. WTP for a given risk change increases with income and education. The estimation results broadly confirm the Bayesian updating assumption, in that WTP increases with baseline exposure to risk, measured by commute time, whether the respondent travels as part of his job and whether he drives a two-wheeler. Mean WTP is three times larger for a respondent who drives a two-wheeler and travels on the job than for one who does not. The results of my survey indicate that the VSL is individuated, i.e., it varies across groups of potential beneficiaries of traffic safety programs (two-wheeler drivers, persons with bachelors degree, etc.). For the most highly exposed individuals--the VSL is about $150,000 (PPP, 2005). Transferred estimates adjusted for income from other developed and developing countries indicate a VSL that is much larger than my estimate. These findings underscore the importance of conducting original valuation studies.Item The Impact of the Washington Metro on Development Patterns(2005-12-05) Vinha, Katja Pauliina; Bockstael, Nancy; Cropper, Maureen; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)It is a tenet of urban planning that transportation networks help shape the spatial configuration of cities. In the case of heavy rail systems, a common belief is that building a subway system will promote employment and population density, thereby discouraging urban sprawl and its negative consequences. This dissertation examines the impact of the Washington Metro rail system in 1990 and 2000 on the distribution of employment and population in two counties in the Washington, DC metropolitan area--Montgomery County and Prince Georges County. It asks whether employment and residential construction increased more rapidly near Metro rail stations than in other parts of the metropolitan area. It also examines the impact of the Metro on the socio-demographic composition of population near Metro stations. Evaluating the impact of the Metro system on employment and population density is complicated by the fact that stations along the Metro line may be located in areas of high population and/or employment density to begin with, or in areas with significant amounts of developable land available. To deal with this issue I use a propensity score matching estimator. The technique is an improvement over the traditional methods of evaluation as it acknowledges the endogeneity of the location of Metro stations. Furthermore, matching estimators relax the functional form assumptions of OLS estimators. The research finds statistically significant impacts on employment and overall development density from proximity to a Metro station and does not find consistent impacts on population or dwelling unit densities. However, for Prince George's County a negative impact on the percentage of the population belonging to a minority is found. The results also suggest that impacts on development are greater closer to the station than farther away and that they are greater the longer the stations have been in operation.