Public Policy Theses and Dissertations
Permanent URI for this collectionhttp://hdl.handle.net/1903/2803
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Item Trade Openness and Well-Being: Do Complementary Conditions Matter?(2008-05-15) Guzman, Julio A; Graham, Carol; Public Policy; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In the last three decades, most of the existing literature using regression analysis to explore the effects of trade on development has conferred the first one a leading role in directly determining cross-country differences on income. Indeed, this should come at surprise, since what trade theory predicts and what results from General Equilibrium Models (an econometric-alternative quantitative tool) recently display are not completely aligned with conventional empirical evidence at hand. According to these sources, the effects of trade liberalization on welfare are indirect, transmitted through several channels, and dependent on multiple initial conditions. Much of such discrepancy may be due to measurement error and omitted variable problems, data limitations, and methodological shortcomings presented in regression analysis. On one hand, there is agreement over the fact that conventional proxies of trade openness contain severe measurement errors. In addition, data on control variables affecting well-being and believed to be correlated with trade became available just recently. On the other hand, and more importantly, the search for a possible contingent or conditional relationship between free trade and well-being has not been a priority in the agenda of mainstream literature with the exception of sporadic and isolated studies, despite the fact that trade theory has long recognized that possibility. Using newly developed policy-oriented measures of trade integration built with information from tariff rates, non-tariff-barriers, and subsidies, and controlling by multidimensional policy areas beyond those found in conventional literature, this study finds evidence of a contingent relationship between trade openness and well-being. More specifically, this investigation arrives at two conclusions. First, unilateral or one-way-street trade liberalization is not associated with higher levels of well-being, showing neither a direct impact nor a conditional one in the presence of complementary conditions. Second, gains in international market access, or multilateral trade openness, do not alone guarantee the achievement of higher levels of well-being, but do demonstrate significant potential for development in the presence of favorable internal conditions, such as those linked to business competitiveness and market efficiency, the promotion and respect of political rights among the citizenry, and the less concentrated distribution of economic and social opportunities.Item The effect of life-cycle cost disclosure on consumer behavior(2007-04-25) Deutsch, Matthias; Ruth, Matthias; Public Policy; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)For more than 20 years, analysts have reported on the so-called "energy paradox" or the "energy efficiency gap", referring to the fact that economic agents could in principle lower their total cost at current prices by using more energy-efficient technology but, nevertheless, often decide not to do so. Theory suggests that providing information in a simplified way could potentially reduce this "efficiency gap". Such simplification may be achieved by providing the estimated monetary operating cost and life-cycle cost (LCC) of a given appliance--which has been a recurring theme within the energy policy and efficiency labeling community. Yet, little is known so far about the causal effects of LCC disclosure on consumer action because of the gap between the acquisition of efficiency information and consumer purchasing behavior in the real marketplace. This dissertation bridges the gap by experimentally integrating LCC disclosure into two major German commercial websites--a price comparison engine for cooling appliances, and an online shop for washing machines. Internet users arriving on these websites were randomly assigned to two experimental groups, and the groups were exposed to different visual stimuli. The control group received regular product price information, whereas the treatment group was, in addition, offered information about operating cost and total LCC. Click-stream data of consumers' shopping behavior was evaluated with multiple regression analysis by controlling for several product characteristics. This dissertation finds that LCC disclosure reduces the mean energy use of chosen cooling appliances by 2.5% (p<0.01), and the energy use of chosen washing machines by 0.8% (p<0.001). For the latter, it also reduces the mean water use by 0.7% (p<0.05). These effects suggest a potential role for public policy in promoting LCC disclosure. While I do not attempt to estimate the costs of such a policy, a simple quantification shows that the benefits amount to 100 to 200 thousand Euros per year for Germany, given current predictions regarding the price of tradable permits for CO2, and not counting other potential benefits. Future research should strive for increasing external validity, using better instruments, and evaluating the effectiveness of different information formats for LCC disclosure.