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UNIVERSITY OF CALIFORNIA, SAN DIEGO Essays in Urban Economics and International Trade A dissertation submitted in partial satisfaction of the requirements for the degree Doctor of Philosophy in Economics by Kilian Tobias Heilmann Committee in charge: Professor Gordon Hanson, Chair Professor Eli Berman Professor Lawrence Broz Professor Gordon McCord Professor Marc-Andreas Muendler 2017 Copyright Kilian Tobias Heilmann, 2017 All rights reserved. The dissertation of Kilian Tobias Heilmann is approved, and it is acceptable in quality and form for publication on microfilm and electronically: Chair University of California, San Diego 2017 iii DEDICATION To my family and friends. iv EPIGRAPH I may not have gone where I intended to go, but I think I have ended up where I needed to be. — D.A. v TABLE OF CONTENTS Signature Page . iii Dedication . iv Epigraph . .v Table of Contents . vi List of Figures . viii List of Tables . ix Acknowledgements . xi Vita ......................................... xii Abstract of the Dissertation . xiii Chapter 1 Transit Access and Neighborhood Segregation. A Study of the Dallas Light Rail System . .1 1.1 Introduction . .2 1.2 Background: The Dallas Area Rapid Transit System . .7 1.3 Data Sources . 10 1.3.1 Census Data . 10 1.3.2 Business Data . 11 1.3.3 Transit Data . 11 1.3.4 Geographic Data . 12 1.4 Methodology . 12 1.4.1 Identification . 12 1.4.2 Regression Setup . 14 1.4.3 Construction of the Treatment and Control Groups . 15 1.4.4 Pre-Trends . 16 1.5 Empirical Results . 17 1.5.1 Neighborhood Income, Poverty, and Employment . 18 1.5.2 Business Patterns . 23 1.5.3 Placebo Tests . 27 1.5.4 Mechanisms . 28 1.6 Conclusion . 32 1.7 Appendix . 53 1.7.1 Robustness Checks . 53 1.8 Acknowledgments . 58 vi Chapter 2 Does political conflict hurt trade? Evidence from consumer boycotts 65 2.1 Introduction . 66 2.2 Background . 72 2.2.1 Muhammad Cartoon Crisis . 72 2.2.2 Senkaku/Diaoyu Islands Conflict . 73 2.2.3 US Boycott of France . 74 2.2.4 Turkey’s Boycott of Israel . 75 2.3 Methodology . 75 2.4 Results . 77 2.4.1 Mohammad Cartoon Crisis . 78 2.4.2 Senkaku Island Conflict . 89 2.4.3 US-French Boycott . 98 2.4.4 Gaza . 101 2.4.5 Substitution Effects . 101 2.5 Conclusion . 104 2.6 Acknowledgments . 113 Chapter 3 Properties of Satellite Imagery for Measuring Economic Activity at Small Geographies . 121 3.1 Introduction . 122 3.2 Data and Descriptive Statistics . 125 3.2.1 Economic Data . 125 3.2.2 Satellite Imagery . 127 3.3 Predictive Power of Satellite Imagery in the Cross-Section . 129 3.3.1 Econometric Setup . 129 3.3.2 Night Lights . 130 3.3.3 Landsat Satellite Imagery . 131 3.3.4 Combining Nightlights and Landsat . 135 3.4 Evaluating Changes in the Time Series . 136 3.4.1 Econometric setup . 136 3.4.2 Empirical Results . 137 3.5 Discussion and Conclusion . 139 3.6 Acknowledgments . 141 Bibliography . 154 vii LIST OF FIGURES Figure 1.1: 1983 Dallas Transit Service Plan depicting planned rail infrastructure and High Occupancy Vehicle (HOV) lanes . 47 Figure 1.2: Dallas 1989 Transit Plan. Rail infrastructure as planned by the 1989 Dallas Transit Service Plan . 48 Figure 1.3: Detailed Timeline of Natural Experiment . 48 Figure 1.4: Rail infrastructure as planned by the 1983 Dallas Transit Service Plan 49 Figure 1.5: Trends of major census tract outcomes for the pre-treatment (1970- 2000) and treatment period (2000) . 50 Figure 1.6: Empirical density function of median family income . 51 Figure 1.7: Trends in Business Openings within treatment tracts and control tracts 52 Figure 1.8: Reproduced 1983 Dallas Transit Service Plan depicting different planning phases. 63 Figure 1.9: Propensity Score Weighting Scheme . 64 Figure 2.1: Lowess Plot (Imports from Denmark) . 78 Figure 2.2: Realized and Counterfactual Trade Levels by Class . 87 Figure 2.3: Realized and Counterfactual Japanese Exports to China . 92 Figure 2.4: Internet Flyers Calling for Boycott . 95 Figure 2.5: Realized and Counterfactual Japanese Exports (HS8703 Motor Cars) 97 Figure 2.6: Realized and Counterfactual Trade Levels (US) . 100 Figure 2.7: Realized and Counterfactual Trade Levels (Turkey) . 103 Figure 2.8: Treatment Effects of Placebo Treatment Times . 112 Figure 2.9: Average Cumulative Returns . 113 Figure 3.1: Administrative Boundaries of Vietnam . 148 Figure 3.2: Histograms of Economic Variables . 149 Figure 3.3: Histograms of Satellite Measures . 150 Figure 3.4: Correlation Heatmap between Nighttime Light Density and Landsat Bands. 151 Figure 3.5: Relationship between Economic Activity and Commune Size . 152 Figure 3.6: Scatterplots: Predicted vs Actual Values . 153 viii LIST OF TABLES Table 1.1: Comparison of Groups . 35 Table 1.2: Dependent Variable: Median Family Income . 36 Table 1.3: Dependent Variable: Median Family Income at Block Group Level . 37 Table 1.4: Quantile Regression. Dependent Variable: Median Family Income . 38 Table 1.5: Dependent Variable: Poverty Rate . 39 Table 1.6: Dependent Variable: Tract Population . 40 Table 1.7: Dependent Variable: Median Housing Values . 41 Table 1.8: Dependent Variable: Unemployment . 42 Table 1.9: Annual Business Openings by Neighborhood. Summary Statistics by Group . 42 Table 1.10: Dependent Variable: Log Business Openings . 43 Table 1.11: Dependent Variable: Median Family Income Placebo . 44 Table 1.12: Per Capita Income by Race . 44 Table 1.13: Dependent Variable: Racial composition . 45 Table 1.14: Dependent Variable: Share of Black Population . 46 Table 1.15: Migration Statistics . 46 Table 1.16: Dependent Variable: Median Family Income (different distance mea- sures) . 59 Table 1.17: Dependent Variable: Median Family Income (different phases) . 60 Table 1.18: Inconsequential Unit Approach, Dep. Variable: Median Family In- come . 61 Table 1.19: Propensity Score Weighting. Dependent Variable: Median Family Income . 62 Table 2.1: Descriptive Statistics (Log Danish Exports) . 79 Table 2.2: Muhammad Comic Crisis: Results . 81 Table 2.3: Muhammad Comic Crisis: Results by Product Type . 83 Table 2.4: Estimated Treatment Effect (Synthetic Control) . 85 Table 2.5: Treatment Effect by Product Type (Synthetic Control) . 88 Table 2.6: Descriptive Statistics (Japanese Exports) . 89 Table 2.7: Senkaku Crisis: Results . 91 Table 2.8: Estimated Trade Disruption . 94 Table 2.9: Estimated One Year Trade Disruption by HS Code (Synthetic Control) 96 Table 2.10: Freedom Fries: Results . 99 Table 2.11: Estimated Trade Disruption (Synthetic Control) . 100 Table 2.12: Gaza: Results . 102 Table 2.13: Substitution Effects . 104 Table 2.14: Composition of Synthetic Control Group I . 111 Table 2.15: Treatment and Control Countries (Muhammad Boycott) . 114 Table 2.16: Top Danish Export Partners and Import Shares . 115 Table 2.17: Estimated Percentage Reduction in Trade by Country . 116 ix Table 2.18: Muhammad Comic Crisis: Trade in Services . 117 Table 2.19: Muhammad Comic Crisis: Danish and Japanese Imports . 118 Table 2.20: Composition of Synthetic Control Group II . 119 Table 2.21: Composition of Synthetic Control Group III . 119 Table 2.22: Japanese Brands mentioned on Boycott Flyers . 120 Table 3.1: Bands of Landsat 7 . 142 Table 3.2: Descriptive Statistics . 142 Table 3.3: Nighttime Lights. Year 2012 . 143 Table 3.4: Landsat Indices. Year 2012 . 143 Table 3.5: Landsat Kitchen Sink Regressions . 144 Table 3.6: Landsat and Nightlight Combination. Year 2012 . 145 Table 3.7: Long Differences Regression: Enterprise and Employment Density . 145 Table 3.8: Long Differences Regression: Real Per Capita Expenditure . 146 Table 3.9: Long Differences Regression. Raw Landsat Bands . 147 x ACKNOWLEDGEMENTS I would like to thank my advisor Gordon Hanson for invaluable guidance and sup- port. I am also grateful to my dissertation committee members Marc-Andreas Muendler, Eli Berman, Gordon McCord, and Lawrence Broz for academic and personal advice. I further benefited from the rest of the Economics faculty with their . Special thanks to Ran Goldblatt for opening up a new door in spatial research. I would also like to thank my friends and colleagues at UCSD for their support during six challenging but great years. Without you, I would not be here. You made me a.