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UC Berkeley UC Berkeley Electronic Theses and Dissertations UC Berkeley UC Berkeley Electronic Theses and Dissertations Title Essays in Environmental Economics Permalink https://escholarship.org/uc/item/61r4c86w Author Lin, Lan Publication Date 2019 Peer reviewed|Thesis/dissertation eScholarship.org Powered by the California Digital Library University of California Essays in Environmental Economics by Lan Lin A dissertation submitted in partial satisfaction of the requirements for the degree of Doctor of Philosophy in Agricultural and Resource Economics in the Graduate Division of the University of California, Berkeley Committee in charge: Professor Michael Anderson, Chair Professor Lucas Davis Professor James Sallee Spring 2019 Essays in Environmental Economics Copyright 2019 by Lan Lin 1 Abstract Essays in Environmental Economics by Lan Lin Doctor of Philosophy in Agricultural and Resource Economics University of California, Berkeley Professor Michael Anderson, Chair This dissertation features three empirical studies on the interaction of economic activities and the environment. Chapter 1 estimates the costs of environment reg- ulations by analyzing administrative records of industrial firms in China. Chapter 2 investigates the relationship between environmental conditions and birth decisions and uses online purchases to infer fertility trends. The last chapter examines house- hold panel scanner data to evaluate the impact of changing fuel prices on consumers' shopping patterns. These three papers take advantage of different data sources to answer important questions in environmental economics, on both the producer and the consumer side. The first chapter measures the impacts of ad hoc environmental regulations in China on firm performance. Under global attention and pressure, the Chinese gov- ernment adopted a number of radical emergency pollution control measures to ensure good air quality during the 2008 Beijing Olympic Games. Polluting plants in and near the city were required to reduce or suspend production, and plants in the more polluting industries and in areas closer to Beijing were subject to stricter regulation. Exploiting this variation in regulatory stringency by time, industry, and distance, I use a triple differences-in-differences design to study the costs of environmental regu- lations on producers in China. I find that firms in heavily-polluting industries within Beijing experienced large negative shocks during the event year, with significant re- ductions in revenue, output, employment, and profits. Nonetheless, the estimated costs of the ad hoc regulations are less than 30% of the previously estimated health benefits from improved air quality. The second chapter explores reasons behind China's declining fertility and ex- amines the role of deteriorating environmental quality. China has one of the world's lowest birth rates, even following the lifting of the one-child policy. Survey results 2 show that concerns over environmental conditions are an important factor affecting child-bearing decisions. In this paper, I use online purchases of products related to child birth to study whether and how pollution level affects fertility intentions. Using a distributed-lag model and exploiting random variation in air pollution stemming from thermal inversions, I find that people have less desire to have more children when air pollution worsens. Long-term changes in air quality have stronger impacts than contemporaneous fluctuations. I also find limited effect heterogeneity between high and low-income cities, suggesting that the negative relationship between fertil- ity intentions and pollution is unlikely due to financial worries such as higher health care expenditures. The third chapter empirically studies the effects of gasoline prices on retail chan- nel choices, especially online channels, using the Nielsen HomeScan Panel Data for more than 12,000 Californian households from 2004 to 2013. I find some evidence that gasoline prices do affect store format choices, and that consumers visit closer stores, reduce shopping trips, and switch away from grocery and discount stores to- ward warehouse clubs and drug stores when gasoline prices are high. However, there is little support to the claim that online sales benefit from rising fuel prices as con- sumers try to avoid driving to save on gas. The estimated effects of gasoline prices on online purchases are both small and insignificant. i To Jinfeng Zhang and Fufen Lin for a lifetime of support and inspirations. ii Contents Contents ii List of Figures iii List of Tables iv 1 Environmental Regulations and Firm Performance: Evidence from China1 1.1 Introduction................................ 1 1.2 Background................................ 5 1.3 Data.................................... 8 1.4 Empirical Strategy ............................ 11 1.5 Results................................... 13 1.6 Conclusion................................. 23 2 Pollution and Fertility Intentions: Evidence from Online Purchases 40 2.1 Introduction................................ 40 2.2 Background................................ 42 2.3 Data.................................... 44 2.4 Theoretical Framework.......................... 46 2.5 Empirical Strategy ............................ 50 2.6 Results................................... 52 2.7 Conclusion................................. 57 3 Are Gas Prices Fueling Online-Offline Competition? Evidence From Household Panel Data 74 3.1 Introduction................................ 74 3.2 Literature Review............................. 76 3.3 Data.................................... 77 iii 3.4 Conceptual Framework.......................... 79 3.5 Results................................... 82 3.6 Conclusion................................. 86 Bibliography 94 Appendix 101 Appendix for Chapter 1 ............................101 Appendix for Chapter 2 ............................115 List of Figures 1.1 Air Quality Index in Beijing and Shanghai, One Year Before Event . 25 1.2 Annual Concentration of Air Pollutants in Beijing, 1998 - 2013 . 25 1.3 Maps and Distance Group Divisions .................... 26 1.4 Summary Plots - Firms Around Beijing................... 27 1.5 Event Study Plots - Firms inside Beijing.................. 28 1.6 Event Study Plots - Firms inside Shanghai................. 29 1.7 Event Study Plots - Robustness Checks - Firms inside Beijing - Output . 30 1.8 Event Study Plots - Robustness Checks - Firms inside Beijing - Total Profits 31 2.1 Population and the Number of New Births in China: 1950 - 2018 . 58 2.2 Average Salary Income in 2013 ....................... 58 2.3 Three Year Average AQI, 2014 - 2016.................... 59 2.4 Average Number of Thermal Inversions in a Month, 2014 - 2016 . 59 2.5 Summary Plots for Trends in Online Purchases .............. 60 2.6 Residuals of Log Number of Purchasers .................... 61 2.7 Impact of Air Quality, Linear Combinations (OLS) . 62 2.8 Impact of Air Quality, Linear Combinations (OLS) . 63 2.9 Impact of Air Quality, Linear Combinations (OLS) . 63 2.10 Impact of Air Quality, Linear Combinations (IV) . 64 3.1 Gasoline Price and E-Commerce Sales ................... 87 iv A1 Number of Firms in Each County......................102 A2 Number of Firms in Heavily-Polluting Industries in Each County . 102 A3 Number of Firms in Each County......................103 A4 Summary Plots - Firms Around Beijing...................106 A5 Summary Plots - Firms Around Shanghai . 107 A6 Summary Plots - Firms Around Shanghai . 108 A7 Event Study Plots - Firms outside but within 100km of Beijing . 109 A8 Event Study Plots - Firms outside but within 100km of Shanghai . 110 A9 Event Study Plots - Firm Turnover: Firms inside Beijing.........114 B1 Summary Plots for Trends in Online Purchases . 116 List of Tables 1.1 Summary Statistics - Firms Around Beijing ................ 32 1.2 Summary Statistics - Firms Around Shanghai............... 33 1.3 Firm-Level Results.............................. 34 1.4 Baseline Firm-Level Results by Industry - Beijing............. 35 1.5 Logistics Costs and Emission Rates by Industry.............. 36 1.6 Robustness Checks for Firms in and near Beijing A............ 37 1.7 Robustness Checks for Firms in and near Beijing B............ 38 1.8 Cost Estimates for Firms in in Heavily-polluting Industries in Beijing . 39 2.1 Summary Statistics.............................. 65 2.2 OLS - Current Period ............................ 65 2.3 OLS - With 3 Lags.............................. 66 2.4 OLS - With 5 Lags.............................. 67 2.5 IV - Current Period.............................. 68 2.6 IV - With 3 Lags............................... 68 2.7 IV - With 5 Lags............................... 69 2.8 OLS: High-Income vs Low-Income Cities - 3 Lags............. 70 2.9 OLS: High-Income vs Low-Income Cities - 5 Lags............. 71 2.10 IV: High-Income vs Low-Income Cities - 3 Lags.............. 72 2.11 IV: High-Income vs Low-Income Cities - 5 Lags.............. 73 v 3.1 Summary Statistics - Average Basket Size Per Trip............ 87 3.2 Summary Statistics - Average Basket Size Per Month: Gas Price < $3 . 88 3.3 Summary Statistics - Average Basket Size Per Month: Gas Price ≥ $3 . 88 3.4 Summary Statistics of Shopping Trips in NHTS Data........... 89 3.5 Effect of Gas Prices on Overall Shopping Behavior ............ 89 3.6 Effect of Gas Prices on Distance Traveled for Shopping (Miles) . 89 3.7 Effect of Gas Prices on Normalized Log Trip Shares Across Formats . 90 3.8 Effect of Gas Prices on Normalized Log Spending Shares Across Formats 90 3.9 Linear Probability of Visit
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