ESSAYS ON ISSUES IN PUBLIC AND ENVIRONMENTAL ECONOMICS

Abstract

This dissertation is composed of three applied economics essays about important topicsin public and environmental economics. The first is an analysis of the distributional effects of demand shocks or demand-shifting policies in the context of energy markets and climate policy. The second focuses on the use of remote monitoring technology and its effects on the provision of the local public good of public safety. The third analyzes the effect of imperfect real-world carbon pricing policies on carbon emissions. Chapter 1 studies the impact of declining coal demand on local labor markets in coal mining regions of the US. I separate the effect of a recent contraction in the coal industry from other factors driving economic trends in coal country by constructing an instrument for coal demand from producing counties. The instrument combines a regional model of coal plant dispatch with variation in the exposure of producing counties to demand shocks from the electricity sector. My estimates demonstrate that demand-driven declines in the value of coal produced eliminate jobs primarily in coal mining and adjacent industries, with the largest effects occurring in Appalachia and the West. I also estimate decreases in in-migration, home values, and expenditures on public education, and increases in poverty. Applied in a stylized spatial equilibrium model of location choice, my estimates imply an aggregate decline of $0.5-1 billion in the economic welfare of coal country residents resulting from a net decline of $3.7 billion in thermal coal production value from 2007- 2017. In Chapter 2, using a novel data set on CCTV cameras in Chandigarh, India, we test whether police officers’ effort changes in response to the presence of traffic cameras. Although the cameras are useful in sanctioning drivers, they can also capture the passive (shirking) or active (rent-seeking) corruption of officers. Accounting for the spatial and temporal variations in the operation of the cameras, we find that the presence of a functioning camera results in an increase in on-the-ground tickets. Although we do not rule out possible decreases in rent-seeking behavior, a decline in passive corruption appears to be driving the increase in officer ticketing behavior, particularly for the most common vehicles and violations that can be observed from the CCTV cameras. Our findings indicate that remote monitoring technology can serve, if not a substitute for, then as a complement to on-the-ground enforcement. In Chapter 3, we contribute to a growing body of empirical evidence on the efficacy of carbon pricing policies, much of which finds that carbon pricing has produced only modest reductions in emissions. We hypothesize that a complex policy environment and political uncertainty are two possible mechanisms behind the limited effects measured in the literature. We focus on the experience of Australia which substantially expanded subsidies for renewable energy in 2009 and also implemented a controversial carbon “tax” from 2012- 2014 before it was repealed. Using synthetic control and recent extensions, we estimate the joint effect of the subsidy expansion and the tax to be substantial. We explore the dynamic nature of the treatment effect as it relates to the changing political environment and explore the mechanisms for the observed reduction in emissions.