Essays in Industrial Organization
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The dissertation focuses on two issues that are broadly related to the urban planning of Washington, DC. The first two chapters consider the burgeoning food truck industry in Washington, DC and the third chapter considers public transit ridership and the impact of large maintenance programs that cause temporary but large decreases in service quality. In Chapter 1 I build and estimate a tractable model that captures some key characteristics of the food truck industry. Characteristics of the industry such as there being many small firms playing an entry game with various dimensions of heterogeneity (for example, cuisine genre and quality) render regulations and policies difficult to assess and design, leading to local regulators resorting to `ad hoc' policies to regulate the industry. For example, in Washington, DC scarce parking spots at popular lunch locations are allocated through a random lottery. This highlights the importance of a tractable model that captures importance features of the industry which can be estimated and used to consider counterfactual policies. In Chapter 2 I consider two counterfactual scenarios. In the first counterfactual scenario I reduce the reach of the lottery and I find that the lottery allows for the survival of firms with lower quality and leads to higher prices. Expected utility for consumers are lower and firm profits are higher in current regime compared to a couterfactual regime where some locations are not included in the lottery. The net welfare effect for this counterfactual scenario is an increase in total daily welfare of $2.294.18. In my second counterfactual scenario where the non-lottery locations have their parking capacity increased by 2 spaces, I find a positive impact for both truck owners and consumers with a net increase in total daily welfare of $8,260.26. Chapter 3 considers the impact of large public transit maintenance programs on long-run ridership. An agency that manages large transit systems must make investments to maintain a level of quality to sustain ridership. If consumers face switching costs when changing their mode of transport, the large and unavoidable disruptions to services resulting from a large maintenance program may provide a sufficient negative utility shock for riders to substitute to alternative modes of transport and not return after the repairs are completed. In this chapter I consider such indirect costs that a transportation agency may incur in the context of Metrorail, the subway system that stretches through the District of Columbia (DC), Maryland (MD), and Virginia (VA) operated by the Washington Metropolitan Area Transit Authority (WMATA). I find that there has been a persistent drop in ridership up to 10 months after the repairs on certain tracks have been completed.