Essays in Public Economics

Abstract

This dissertation consists of three independent essays on public auctions.The first essay studies the impact of small order exemptions from competitive procurement on the distribution of contract sizes. The procuring entity in Chicago responds to legal restrictions on the size of contracts that can be exempted from the costly competitive procurement process by designing contracts in order to keep their size below the legal threshold. This breaking down of contracts does not appear to be caused by political interference. The second essay studies the bid exclusion in public procurement auctions. Procurement officers in the City of Chicago have the legal discretion to exclude the lowest bidding firm in a first-price auction if they deem the bidder is not "responsive and responsible." Bureaucrats execrise this discretio frequently and use it to erect barriers to entry for firms based outside of Chicago and for firms with no prior business with the City. Using a structural model estimated on auction data from 2000 through the present, the strategic response of firms increases the total cost of the bid exclusion to the City by more than double. The final essay studies within-teacher differences in the ability to teach student subgroups, i.e. Black and white students. The typical constant teacher effects assumption is relaxed and allowed to differ based on a binary student characteristics. Using data from elementary school exams in North Carolina, teacher causal effect differentials are estimated and the hypothesis that teachers do not have differences in their impacts between student groups is rejected. These differences are largest on reading test scores and across race (vs. gender). Teachers' causal effect differential estimates are consistent with student-teacher match effects.