Year: 2012
Type: dissertation
Abstract: Economic activities are fundamentally influenced by their location in space, which \ndetermines the physical and natural environment in which they take place. Likewise, \nlocation defines the social context of economic activity prescribing the particular \nlaws, regulations and social norms to which it should conform. Moreover, spatial \nlocation defines proximity, which shapes the costs of accessing factor inputs, product \nmarkets and other economic and social institutions. In fact, spatial location mediates \nmost forms of interaction, intended and unintended, that may arise from \ncommunication and connections between economic agents. These spatial processes \nhave important implications for estimation, policy evaluation and prediction in \nmodels of economic activity. \nThis thesis is comprised of two parts. Part I presents a broad range of issues that \narise in estimation due to space and frames these as general spatial omitted variables. \nI explore the use of semi-parametric estimators to identify the parameters of interest \nin this general model and derive identification conditions for fixed and local adaptive \nspatial smoothing estimators. The properties of these estimators are contrasted to \nOLS and spatial econometric estimators. \nPart II addresses issues in policy evaluation and prediction. I derive an equilibrium \nsorting model with endogenous tenure choice that can be used to evaluate the general \nequilibrium welfare effects of policies that affect local environmental quality. Using \na series of simulations, motivated by a real world policy application, I contrast the \nwelfare changes derived under this model to a conventional static approach. By \nallowing for rental and purchase markets the model I develop provides a far richer \ncharacterisation of the complex adjustments that propagate through the property \nmarket following policy changes and the contrary impact such policies can have \nupon renters and owners. The usefulness of the model for applied policy analysis is \ndemonstrated through two applications: The Polegate Bypass and Mortgage Interest \nDeduction reform. \n
Author: Amy Binner
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W798633900