The first chapter of my dissertation uses a competition framework to reexamine the U.S. railway expansion from 1870 to 1890. Do reductions in trade costs increase the income levels of trading regions? The answer of most theoretical trade models is yes, and these models are used by policy-makers to justify investments in new transportation infrastructure to reduce trade costs. I reexamine this question by investigating the impact of the U.S. railway expansion from 1870 to 1890 on county economic growth. My main insight is that while the construction of a new transportation network can benefit a location by increasing producers' access to markets, it also can hurt a location by giving other locations a competitive edge. I derive and test empirically testable implications of the joint effects of market access and competition on economic outcomes from a multisector trade model. I find that on average more than 50% of the benefit of market access is offset by the negative effects of competition. Overall, I find that the expansion of railways increased agricultural land values by 20% to 40%, thus implying that railways explain 1% to 2% of 1890 GNP. My estimates of the impact of railways on American economic growth are lower than those of Donaldson and Hornbeck (2016) and closer to those of Fogel (1964).
In the second chapter I study the effects of sector-specific productivity shocks on the distribution of production. The general-equilibrium trade model implies that the production in a certain location depends not only on its own productivity shocks but also on productivity shocks in competing locations. I derive several testable implications of the joint effects of one location's own productivity shock and productivity shocks in competing locations on the location's production. I test these implications by investigating the impact of the boll weevil in the early 20th century United States on the cotton belt's cotton acreage. I find (1) when few lands in the cotton belt were infested by the boll weevil, the presence of the boll weevil decreased the infested county's cotton acreage; (2) as the boll weevil expanded to more lands, the infested county's cotton acreage would gradually recover; (3) as the boll weevil expanded to more lands, cotton acreage in uninfested counties would increase. The movement of other economic outcomes which closely associated with the cotton production (such as corn acreage, total farm acreage, agricultural land value, population, and the tenancy system) mirrored the movement of the cotton acreage. My findings are in line with the argument that the boll weevil caused the internal shift in the cotton belt but rarely changed the whole cotton belt.
In the third chapter, coauthored with Ming Gu, we discuss the long-run effects of the propaganda by the central government on people's preference formation. This link is taken as given but never proved in the previous literature. This paper examines the impact of government propaganda on people's attitudes towards gender equality in China, which imposes strict media censorship, advocates gender equality, and experiences growth in female labor participation. We find the high propaganda intensity would lead to progressive gender-related attitudes in female labor participation, but also conservative attitudes in housework share. It is consistent with the context of gender equality propaganda in China. Propaganda has larger positive effects on women than men. Women were affected in the age range between 0-25, while men were affected in the age range between 0-17. Propaganda also reduced boy preference for both men and women at the age range between 18-25, the marriage age and childbearing age of most Chinese.