Essays on Environmental Economics and Industrial Organization

Abstract

My dissertation encompasses two distinct lines of research related to environmental economic and industrial organization. In the first chapter, I measure the different driving behavior between high and low efficiency NYC taxi drivers. Fuel efficiency has improved because of environmental policies and high gas prices. In most cases, increased vehicle usage is associated with negative outcomes because of potentially increasing emissions. In the New York City (NYC) taxi industry, however, increased vehicle usage corresponds to increased supply, which is meaningful because of limits on the number of permissions and the fixed fare system. I estimate the impact of fuel efficiency improvement on the driving behaviors of NYC taxi drivers by using a fixed effects model. Three types of taxi driver decisions are considered: customer search distance, number of working hours, and shift participation. The results show that fuel efficiency improvement stimulates NYC taxi operators to drive further distances when searching for customers, and drivers of hybrids are more responsive to changes in gas prices. Drivers, however, do not work longer shifts when operating high efficiency vehicles; moreover the probabilities of using high or low efficiency vehicles are similar, although increases in gas prices lead to more use of hybrids. In the second chapter, I estimate the impact of air pollution on the Korean professional baseball attendance. People tend to avoid pollution to protect their health and pollution decreases economic productivity. So, high levels of air pollution can cause people to avoid outdoor activities. This paper analyzes the impact of air pollution on Korean baseball attendance with a focus on particulate matter. The results show that the levels of PM do not affect attendance but announcements that describe the PM level as in the ``bad'' stage are effective. When the ``bad'' announcements about PM 10 occur, attendance falls roughly 8 percent. This amount is similar to the impact of rain. The impact of other pollution and the PM level on previous days are estimated, but their coefficients are not statistically significant. Finally, in chapter three, I analyze the entry competition between Korean small retail stores and simulate the impact of the minimum distance policy. Self-employment in Korea accounts for a larger share of the workforce than in many OECD countries, but self-employed Koreans have been struggling. For this reason, Koreans believe that policies are needed to protect the self-employed. Among these policies, the minimum distance recommended by the Korean Fair Trade Commission is the most widely requested but has not been enacted into law. I set up a structural model of an entry game in small grocery retail stores in Seoul. Applying Mazzeo's (2002) structural model approach, I contrast two types of stores: franchise convenience and traditional stores. Based on the estimation results, simulations are conducted to calculate the impact of the minimum distance policy. Most of the estimates of profit function parameters match with intuition and the equilibrium selection rules do not vary much from the estimation results. The impact of the minimum distance policy causes the number of franchise convenience stores to decrease and it increases the number of traditional stores. The number of total small retail store increases by 6.64% in one simulation and 2.79% in another. Thus, the minimum policy could be a useful way to increase the number of self-employed stores in the Korean retail sector.