Person:

Sullivan, Daniel McArthur

Chapter 1 presents evidence that current economics research significantly underestimates the effects of air pollution, regardless of the outcome of interest. This bias exists even in quasi-experimental estimates and arises because popular methods used by economists, including geographic diff-in-diffs and monitor-based interpolations, are unable to account for sharp changes in exposure over short distances. To solve this problem, I use an atmospheric dispersion model to determine the effect of every polluting firm on every house in greater Los Angeles. I then estimate the effect of NOx emissions on house prices using the exogenous variation in emissions caused by the California Electricity Crisis of 2000 and a cap-and-trade program in greater Los Angeles. The estimated price response is much larger than past estimates while conventional methods are unable to detect any effect.

In Chapter 2, I use these methods to explore the equity implications of the Crisis-induced pollution reduction. I also present a locational equilibrium model and derive conditions under which lower-income residents are displaced by higher-income immigrants after an arbitrary local amenity is improved. I find that rents increased significantly in improved neighborhoods, on par with house prices. Simultaneously, total population decreased, driven by a mass outmigration of low-education residents. Low home-ownership rates among low-income households suggests that emigrants were not responding to a wealth windfall but were instead made worse off by the amenity improvement.

Chapter 3 considers the principal-agent problem that arises when consumers file for bankruptcy. Lawyers advise debtors on whether to file the cheaper Chapter 7 filing or the more expensive Chapter 13 filing. Bankruptcy courts that allow lawyers to charge more for Chapter 13 see a significantly larger fraction of Chapter 13 filings. This is true controlling for a host of demographic controls at the zip code level and with state fixed effects and district policy controls. Our estimates suggest that 5.4% of cross-district variation in relative Chapter 13 rates could be eliminated by harmonizing relative fees.