Wind, water and waste: three essays in applied microeconomics

Gillis, Monica

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https://hdl.handle.net/2142/115768 Copy

Description

Title

Wind, water and waste: three essays in applied microeconomics

Author(s)

Gillis, Monica

Issue Date

2022-04-21

Director of Research (if dissertation) or Advisor (if thesis)

Osman, Adam

Doctoral Committee Chair(s)

• Osman, Adam
• Albouy, David

Committee Member(s)

• Kleemans, Maria
• Deryugina, Tatyana

Department of Study

Economics

Discipline

Economics

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

economics

Abstract

This dissertation assesses the impact of exogenous shocks (hurricanes) as well as an endogenous cash prize on local economies. In the first chapter, I investigate the impact of hurricane-force winds on economic activity. Hurricanes cause extensive coastal damage, yet development and population growth in coastal areas remains disproportionately high, in part due to growth in tourism. Using a difference-in-differences methodology and accounting for location characteristics, I estimate the impact of hurricanes on economic activity through changes in nighttime lights. In tourism-intensive coastal areas, hurricanes cause a persistent (5-year) reduction in economic activity, equivalent to approximately 15 million dollars per storm (as seen in an eleven percent drop in lights); in other coastal areas, hurricanes cause a similar reduction, but only for a single year. Results indicate that tourism intensity slows recovery, possibly due to associated declines in tourism consumption and substitutions to other touristic destinations. Second, I investigate hurricane impacts further through the impact of hurricane-induced deluges on local labor market outcomes. Hurricanes are known as, and widely considered, a coastal phenomenon. However, due to warming oceans, hurricanes are becoming wetter, slower, and more damaging (Sobel et al., 2016; Zhang et al., 2020). Urban population growth is compounding this effect. When hurricane-induced rain drops extreme precipitation over an urban area, the water does not drain easily due to the impermeability of roads, sidewalks, and buildings. As a result, drainage systems are easily overwhelmed, often causing floods. Using a two-way fixed effects design with precipitation as a measure of hurricane-exposure, I find that hurricane-induced rain causes a short-term increase in unemployment by twelve percent, and an eight percent increase in workers holding two or more jobs. There is also evidence of a reshuffling of the labor market, with more workers in manufacturing and fewer in commerce. These results are a promising first step in using rainfall as a measure for hurricane-exposure. Finally, I assess the impacts of a non-competitive cash incentive program on behavioral change. In 2012, the rate of people defecating outside, as opposed to using a toilet, was 48.3% in India— almost twice the rate for all of sub-Saharan Africa, 24.9% (Coffey et al., 2014). This is despite the Government of India implementing multiple sanitation campaigns since 1986 to encourage toilet use. Using panel data from 2004 and 2012, this paper assesses the impact of a government-sponsored program, running from 2005-2011, which gave financial awards to villages for becoming 100% open-defecation free. The prize money was significant and the prize was not competitive, yet only a small fraction of villages won. In addition, most villages reverted back to open defecation within a few years. Using a propensity-score weighted regression, I find statistically significant positive impacts of this government program on toilet use in the short-run. Winning the award led to an increase in toilet use of between six and nineteen percentage points for residents of winning villages. However, the prize was essentially a transfer of wealth to already-wealthy villages that were more likely to use toilets ex-ante.

Graduation Semester

2022-05

Type of Resource

Thesis

Copyright and License Information

Copyright 2022 Monica Gillis

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