Essays in public economics
- This dissertation comprises three chapters. The first analyzes how competition between localities affects tax breaks and business location decisions. Using data on firm-specific property tax exemptions, I begin by documenting that spatial competition substantially increases local tax breaks. To do so, I exploit variation in the number of counties near a town, which is correlated with competition but uncorrelated with other observable town characteristics. I then use this pattern to estimate a model of localities competing for mobile firms by offering tax breaks. In counterfactual exercises, I find that policies that reduce competition between localities, such as restricting which levels of government can offer tax breaks, have very little effect on equilibrium firm locations but may lower total exemptions by up to 30%. These findings suggest that local tax breaks primarily lower the taxes paid by mobile firms and are unlikely to substantially affect the efficiency of firm location. The second chapter, co-authored with Raymond Kluender, studies health insurance exchanges. Information frictions in markets for insurance affect not only the choices consumers make, but also the menu of plans insurers offer. We illustrate this observation using an information friction in Medicare Advantage—beneficiaries pay two premiums, and one is much more salient. We find a larger demand elasticity for the salient versus non-salient premium. A model of insurer plan design produces simulated premiums matching the observed distribution when accounting for differential salience, but not when assuming equal elasticities across the two premiums. Removing the friction increases demand for low-premium plans, increasing consumer surplus by just $5/year with supply fixed, increasing to $73/year when allowing supply to respond to the shift in demand. The third chapter, co-authored with Ian Hoffman, uses a machine learning framework to study heterogeneous effects of local economic shocks on income, employment, and amenities. We begin by showing that positive shocks to local labor demand and federal spending both have a positive effect on economic and amenity outcomes. We then use a ``causal tree" method to conduct a data-driven search for heterogeneity in these effects. Both economic effects and amenity spillovers are larger in above median-income counties and counties within a metropolitan area. This suggests that reallocating economic activity to these areas could potentially increase aggregate welfare, and that place-based policy, to the extent that it is similar to the studied shocks, may benefit the targeted population more in urban areas.
|Type of resource
|electronic; electronic resource; remote
|1 online resource.
|Stanford University, Department of Economics.
|Hoxby, Caroline Minter
|Hoxby, Caroline Minter
|Statement of responsibility
|Submitted to the Department of Economics.
|Thesis (Ph.D.)--Stanford University, 2017.
- © 2017 by Evan Mast
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
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