Browsing by Subject "Spillovers"

Urban problems have several features that make them inherently dynamic. Large transaction costs all but guarantee that homeowners will do their best to consider how a neighborhood might change before buying a house. Similarly, stores face large sunk costs when opening, and want to be sure that their investment will pay off in the long run. In line with those concerns, different areas of Economics have made recent advances in modeling those questions within a dynamic framework. This dissertation contributes to those efforts.

Chapter 2 discusses how to model an agent’s location decision when the agent must learn about an exogenous amenity that may be changing over time. The model is applied to estimating the marginal willingness to pay to avoid crime, in which agents are learning about the crime rate in a neighborhood, and the crime rate can change in predictable (Markovian) ways.

Chapters 3 and 4 concentrate on location decision problems when there are externalities between decision makers. Chapter 3 focuses on the decision of business owners to open a store, when its demand is a function of other nearby stores, either through competition, or through spillovers on foot traffic. It uses a dynamic model in continuous time to model agents’ decisions. A particular challenge is isolating the contribution of spillovers from the contribution of other unobserved neighborhood attributes that could also lead to agglomeration. A key contribution of this chapter is showing how we can use information on storefront ownership to help separately identify spillovers.

Finally, chapter 4 focuses on a class of models in which families prefer to live

close to similar neighbors. This chapter provides the first simulation of such a model in which agents are forward looking, and shows that this leads to more segregation than it would have been observed with myopic agents, which is the standard in this literature. The chapter also discusses several extensions of the model that can be used to investigate relevant questions such as the arrival of a large contingent high skilled tech workers in San Francisco, the immigration of hispanic families to several southern American cities, large changes in local amenities, such as the construction of magnet schools or metro stations, and the flight of wealthy residents from cities in the Rust belt, such as Detroit.

To date, the creation of protected areas (PAs) has been the dominant policy in the efforts to protect forests. Yet there is still somewhat limited rigorous evidence about the impacts of PAs on rates of deforestation. Further, most of the existing evidence concerns the impacts of protection within the boundaries of PAs. Much of that existing evidence does not use the characteristics of the protected lands when generating the baselines to which outcomes on protected lands are compared in order to infer the PAs' impacts. Yet even when impact within a PA has been estimated as rigorously as possible, since the total impact of protection involves impact not only inside the PA but also outside the PA even the best possible estimates of impacts within PAs could mis-state total PA impacts. Overstatements occur if there is "leakage" from PAs, i.e., spillovers of activities to forests outside PAs, so deforestation outside is higher than it would have been without the PAs.

My dissertation starts with a reduced form examination of net local spillovers. We follow this with an evaluation of two mechanisms through which PAs could affect forest nearby. In particular we explore two novel angles by considering both migration choices and road building decisions. PA creation could affect the development equilibrium by shifting private and public expectations to lower migration and road building where the PA is established, beyond the PA's boundaries. My dissertation explores implications of such thinking and provides novel empirical evidence for the Brazilian Legal Amazon.

Chapter 1 estimates deforestation spillovers around Brazilian Amazon PAs. Given PA location bias towards regions with low deforestation pressure, we use matching methods to control for observable land characteristics that may confound PAs' impacts. Specifically, we compare 2000-2004 and 2004-2008 deforestation on the land nearby to PAs with clearing of untreated forests similar in key deforestation determinants. We find that some PAs reduce deforestation rates nearby and, consistent with deforestation impacts inside PAs, those local spillovers vary across the landscape. Reductions are significant near roads and cities − not expected if the result is due to insufficient empirical controls but unsurprising if real impacts are arising due to PAs − and around an understandable subset of PAs. This result contrast sharply with most existing analyses of PAs' spillovers where, if anything, 'leakage' (higher nearby clearing) is discussed and observed. Yet we affirm a more general point that local spillovers depend on local development dynamics.

Chapter 2 examines one mechanism for the prior result that PAs lowered rates of deforestation nearby. Given migration's importance throughout the history of this forest frontier, we ask whether dissuading migration could be a mechanism for protection's local conservation spillovers. Examining individual migration decisions among the Amazon municipalities, we find that Federal PAs − previously seen to reduce rates of deforestation near PAs − seem to encourage outmigration from and discourage migration to PA areas.

Chapter 3 examines another mechanism for the result in my Chapter 1. We consider a recent expansion of the unofficial roads networks in the Brazilian Amazon to provide initial evidence concerning whether PAs may affect such investments in development. Specifically, controlling for prior roads − both official and unofficial − we test whether the growth in unofficial roads between 2008 and 2010 is reduced by establishments of PAs. Thus, we examine road growth as another potential mechanism for forest spillovers from PAs. Controlling for relevant observable factors, and using both matching and OLS, we find that having a large fraction of municipal area in PAs − in particular Federal PAs − reduces the growth of unofficial roads. Such impacts can significantly influence regional development patterns.

Developing countries often hoard the largest number of species, but also experience very high poverty levels. This dissertation reviews the evidence of the performance common conservation interventions. I find that despite the billions of dollars channeled towards conservation efforts annually, there is still very limited evidence whether or not conservation policies work. The evidence has been limited to exceptional countries like Costa Rica and Thailand and outlines like deforestation, without considering ecosystem function and ecosystem services. Furthermore, I find that the conservation impact evaluation literature has currently not highlighted the channels through which conservation policies effect change and how the effectiveness varies with the baseline characteristics of the area.

This dissertation aims to address some of the gaps in current conservation literature. Focusing on Indonesia between 2000 and 2006, I evaluate the performance of protected areas in terms of stalling deforestation as well as providing a wide range of ecosystem services and benefits (Chapter 2). In Chapter 3 I examine the role of context in which protected areas operate and show significant heterogeneity in their performance. In Chapter 4 I develop a static spatially explicit model of household fuelwood extraction that allows me to predict the location and magnitude of spillovers when a protected area is introduced. I find that depending on the characteristics of the areas, it may be optimal for households to buy fuelwood than collect it.