The welfare Eeffects of macroeconomic trends in markdowns and technology
Abstract/Contents
- Abstract
- This dissertation consists of three essays on market power and technology. The first chapter assesses how changes in market power and technology have contributed to the decline of the share of national income paid out to workers. In particular, I jointly quantify the impact of markups, markdowns, and technology on the decline of the German labor share. I find that markdowns have steepened significantly over the last two decades. The estimated markdown trend explains more than half of the observed decline of the German labor share. A downward trend in the production elasticity of labor, consistent with factor substitution away from labor, accounts for the remainder. I find that markups have remained stable over the last two decades. I assess the welfare consequences of the observed markdown trend using a heterogeneous firm general equilibrium model. I find that the growing markdown wedge has been associated with consumption equivalent welfare losses of 2.9%. The second essay examines the economic implications of one particular technology, namely the technology to sell goods and services online. This chapter is jointly written with Liran Einav, Pete Klenow, Ben Klopack, Jon Levin, Larry Levin and Wayne Best. E-commerce represents a rapidly growing share of consumer spending in the U.S. We use transaction-level data on credit and debit cards from Visa, Inc. between 2007 and 2017 to quantify the resulting consumer surplus. We estimate that e-commerce spending reached 8% of consumption by 2017, yielding consumers the equivalent of a 1% permanent boost to their consumption, or over $1,000 per household per year. While some of the gains arose from avoiding travel costs of buying from local merchants, most of the gains stemmed from substituting to merchants available online but not locally. Higher income cardholders gained more, as did consumers in more densely populated counties. The third essay contributes to the methodological literature on the estimation of production technology. I assess the identification of Cobb-Douglas production functions in the presence of cross-sectional input price heterogeneity. I show that identification depends crucially on i) whether input prices are observed and ii) whether firms are price takers in the input market. I derive sufficient conditions for identification in the different environments and discuss when prices and lagged quantities are valid instruments. I find that lagged input quantities are generally not valid instruments for current quantities, even in the presence of cross-sectional price variation. Identification is especially challenging when prices are not observed, but can be restored if the exact input price process is known
Description
| Type of resource | text |
|---|---|
| Form | electronic resource; remote; computer; online resource |
| Extent | 1 online resource |
| Place | California |
| Place | [Stanford, California] |
| Publisher | [Stanford University] |
| Copyright date | 2020; ©2020 |
| Publication date | 2020; 2020 |
| Issuance | monographic |
| Language | English |
Creators/Contributors
| Author | Dolfen, Johannes Paul |
|---|---|
| Degree supervisor | Klenow, Peter J |
| Thesis advisor | Klenow, Peter J |
| Thesis advisor | Bloom, Nick, 1973- |
| Thesis advisor | Einav, Liran |
| Degree committee member | Bloom, Nick, 1973- |
| Degree committee member | Einav, Liran |
| Associated with | Stanford University, Department of Economics. |
Subjects
| Genre | Theses |
|---|---|
| Genre | Text |
Bibliographic information
| Statement of responsibility | Johannes Paul Dolfen |
|---|---|
| Note | Submitted to the Department of Economics |
| Thesis | Thesis Ph.D. Stanford University 2020 |
| Location | electronic resource |
Access conditions
- Copyright
- © 2020 by Johannes Paul Dolfen
- License
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
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