This paper develops a simple analytical model of price and frequency competitionamong freight carriers. In the model, the full price faced by a shipper (a goodsproducer) includes the actual shipping price plus an inventory holding cost, whichis inversely proportional to the frequency of shipments offered by the freight carrier. Taking brand loyalty on the part of shippers into account, competing freightcarriers maximize profit by setting prices, frequencies and vehicle carrying capacities. Assuming tractable functional forms, long- and short-run comparative-staticresults are derived to show how the choice variables are affected by the model’sparameters. The paper also provides an efficiency analysis, comparing the equilibrium to the social optimum, and it attempts to explain the phenomenon of excesscapacity in the freight industry.

This dissertation consists of three essays on urban economics. The first essay applies the concept of agglomeration economies to the firm using a theoretical model of worker interaction. Next, the second essay takes an empirical approach to evaluate the efficacy of the Section 8 Housing Choice Voucher program, the largest housing program in the United States of America, in addressing residential crowding across the nation. Finally, the third essay empirically investigates the effect of grocery stores on property values by analyzing the effects of the Food Retail Expansion to Support Health program in New York City. Each essay's conclusion comments on amenities and what influences them. The first essay sheds light on why a firm would want to invest in its social infrastructure even if socializing is not directly related to productivity. Technological agglomeration economies are one reason for the existence of big cities, a common example being "cross-fertilization" that occurs when workers of different firms interact with each other. This "cross-fertilization" could be applied to workers in a specific firm, presenting a reason for a firm to invest in socializing at the workplace. A theoretical model of worker interaction shows that the socially optimal level of socializing is risk dominated by lower levels of socializing, even when socializing is beneficial for productivity. A profit maximizing firm recognizes the benefits to productivity and would prefer its workers to socialize more, at the socially optimal level. Hence, greater profits from increased productivity drive the incentive for a profit maximizing firm to invest in the work environment.

The second essay evaluates the effectiveness of the Section 8 Housing Choice Voucher program in tackling the problem of residential crowding. Prior research shows that expanding the Section 8 Housing Choice Voucher program has varying price effects on different parts of the rental housing market. While recipients will certainly benefit from the added vouchers, there is ambiguity in the impacts on quality of life for non-recipients in the broader housing market. Excessive crowding in homes, dubbed overcrowding, is one measure of quality of life because overcrowding can lead to adverse outcomes such as stunted child development, adverse mental health, and an increased risk in spreading infectious diseases such as COVID-19. This paper makes use of an exogenous increase in the supply of Section 8 housing vouchers in a panel setting to ascertain the effectiveness of a program provided at the federal level in tackling housing overcrowding throughout the nation. Estimation of a linear probability model shows that adding vouchers reduces the incidence of overcrowding: a 10% increase in the supply of vouchers reduces the likelihood that a housing unit is overcrowded by 0.081 percentage points. The mechanism behind the effect is shown to correspond with anecdotes about overcrowding: households experiencing misfortune, financial difficulties, or other tenuous circumstances double-up with higher-income households. Hence, a voucher enables the troubled household to move into more suitable living arrangements.

The third essay explores the Whole Foods Effect. The effect of grocery stores on property values is difficult to establish because of the endogeneity between where people choose to live and where grocery stores choose to operate. This paper is the first to establish that nearby grocery stores are local amenities, leading to higher property values, by using the Food Retail Expansion to Support Health (FRESH) program in New York City. On average, a residential property located near a new grocery store experiences a 7.94% increase in value. An exploration of mechanisms indicates that opening more grocery stores not only contributes a direct effect to the increase in property values through an improvement of local amenities, but that it also attracts and sustains complementary businesses such as restaurants, thereby leading to a further increase in property values through an indirect improvement of local amenities.

This dissertation consists of three chapters, where I use a combination of empirical methods and model simulations to study topics in public economics and urban economics.

Chapter 1 studies inspector leniency as a challenge to regulation enforcement in the context of Los Angeles County restaurant hygiene inspections. Inspectors score restaurants numerically, but only letter grades reflecting wide score intervals are mandatorily disclosed. In this chapter, I show that inspector leniency has compromised the effectiveness of health grades in signaling restaurants' hygiene conditions, as restaurants whose grades are inflated to A have significantly worse hygiene conditions than restaurants who have earned their A. Moreover, I find that inspector leniency discourages hygiene improvements by preventing a re-inspection that a restaurant would likely request if they did not experience grade inflation. This chapter then uncovers a novel motive behind inspector leniency: inspectors avoiding work that does not increase promotion prospects, and proposes changes to the inspector performance evaluation policy as a remedy. Lastly, I evaluate the effects of policy interventions aimed at reducing inspector leniency on inspectors' grading and restaurants' sanitation efforts under a theoretical framework.

Chapter 2 develops an empirical framework to evaluate plug-in electric vehicle (PEV) charger sufficiency. With the transportation sector being the largest contributor of greenhouse gas emissions in the United States, states are actively planning the deployment of PEVs. Mass adoption of PEVs requires attracting potential buyers living in multi-unit dwellings (MUDs). Given the current low adoption rate of PEVs in MUDs and MUD residents’ reliance on public charging, this chapter studies whether there is a positive correlation between the number of public L2 chargers and MUD density (measured by total square footage of MUD per capita) across census block groups (CBGs) in LA County. The results show that high MUD-density CBGs and low MUD-density CBGs do not differ much in terms of the number of chargers. The charger-to-PEV-ratio range for MUD residents derived in this paper is below the ideal charger-to-PEV-ratio range in the literature. A direct policy implication is that more charging infrastructure should be made available to MUD residents.

Chapter 3 studies how people respond to freeway congestion along their commute to work in Greater Los Angeles. Traffic congestion is a growing problem in major metropolitan areas. This chapter develops a novel approach to measuring historical congestion by using open-sourced road network data augmented with historical speeds collected from freeway traffic detectors. Using annual data on tract-to-tract commute flows within Greater Los Angeles and congestion on the commute from 2010 to 2019, I find that the number of commuters on a given route decreases as congestion along the route increases. In addition, I find suggestive evidence that this decrease more likely results from workers changing jobs for a less-congested commute at the cost of lower pay, than from workers relocating their residences for a less-congested commute, or dropping out of the labor market.

My dissertation is composed of three chapters that focus on competition and regulation in the telecommunications industry.

The first chapter investigates the main determinants of mobile service prices and evaluates the impact of market structure and regulations on retail prices. Both a simultaneous equations model and a reduced form model are estimated using a panel dataset for 36 countries over the period of 1999-2010. The market concentration of mobile network operators (MNOs) has a statistically significant effect on prices in the reduced form regression. The coefficients of regulatory variables, such as mobile number portability (MNP), mobile virtual network operators (MVNOs) and mobile termination rates (MTR), are not significant in both estimations, suggesting that it is hard to conclude that ex post regulations are effective in mature markets. Country-specific cost factors such as population density, interest rates and unit labor costs have positive impacts on prices.

The second chapter examines the structure of the household expenditure on telecommunications services and their relationship with other existing expenditures in South Korea. To estimate the demand for telecommunications services, the linear approximate Almost Ideal Demand System is implemented. The short-run relationship is estimated using a seemingly unrelated regression (SUR) with first differenced series of data, and the long-run relationship is examined through a Vector Error Correction Model (VECM). Both empirical results suggest that the household demand for telecommunications services is income inelastic over the period of 1990.1Q to 2013.2Q while it becomes price elastic after 2006. The results also show that recent telecommunications services have a complementary relationship with public transportation and substitution relationship with cultural services and private education.

The third chapter analyzes the optimal features of three-part tariffs in the presence of heterogeneous consumers for the monopoly case and the duopoly case. Under monopoly case, the low demand users consume at the allowance level while the high demand users consume above it. The marginal utilities of consumption for the low demand type and high demand type exceed marginal cost, and the lump sum fee extracts all the surplus of low demand type. Under duopoly, asymmetric equilibria do not exist and only a symmetric three-part tariff can be achieved as an equilibrium where marginal utilities for all consumers equal marginal cost, confirming that a standard Bertrand outcome holds under the three-part tariff with heterogeneous consumers.

The present thesis is comprised of four essays that address important gaps in passenger- and cargo-airline research. Seminal studies in airline economics that rely on cross-section methods make critical homogeneity assumptions and preclude time-specific effects. The essays in this thesis use panel data, which allow for certain assumptions made by cross-sectional studies to be relaxed, while shedding light on the intertemporal features of air transport.

The first chapter investigates the cost structure of air cargo carriers by applying a total cost model used in passenger-airline studies. Using quarterly panel data (2003-2011) on the domestic operations and costs of FedEx Express and UPS Airlines, empirical results indicate that the air cargo industry exhibits increasing returns to traffic density and constant returns to scale. Accounting for carrier-specific differences in cost structure and network size, FedEx is found to be more cost efficient than UPS (a finding that is reversed when network size is not controlled). Individually, UPS exhibits substantial economies of density and constant returns to scale while FedEx's cost structure is characterized by weak economies of density and constant returns to scale. Both carriers exhibit economies of size.

The next three chapters embody papers that use quarterly panel data of city-level air traffic, airline delay, and socioeconomic variables. Spanning 10 years (2003-2012), the panel structure of the data permits the use of fixed effects to control for city-specific heterogeneity.

The second chapter presents a paper prepared for the Airport Cooperative Research Program (ACRP). The study demonstrates the within-city traffic impacts of urban size, employment composition, and wages, providing new insights into the determinants of passenger and air cargo traffic. The essay also confirms that airport traffic is proportional to population, and that service-sector employment and higher wages induce passenger travel and goods movement. A city's share of manufacturing employment, however, only impacts air cargo traffic. Passenger enplanements exhibit more sensitivity to the proportion of urban workers providing non-tradable services, compared to the share of workers in tradable service jobs.

The third chapter, co-authored with Andre Tok, examines the determinants of air cargo traffic in California. The study uses a shorter 7-year panel (2003-2009), and shows that service and manufacturing employment impact the volume of outbound air cargo. Total (domestic) air cargo traffic is found to grow faster than (proportionally to) population, while wages play a significant role in determining both total and domestic air cargo movement. Metro-level air cargo tonnage are also forecasted for the years 2010-2040, indicating that California's total (domestic) air cargo traffic will increase at an average rate of 5.9 percent (4.4 percent) per year in that period.

The final chapter is co-authored with Volodymyr Bilotkach, and it provides the first evidence on the impact of airline delays on urban-sectoral employment. Controlling for unobserved city-specific differences, the empirical estimates of the effects of air traffic on total employment are comparable to previously reported measures. However, service-sector employment is found to be less sensitive to air traffic than other studies suggested. New evidence confirming that delays have a negative impact on employment is also provided, a finding that is robust to various model specifications.

This dissertation answers three questions in urban and labor economics. Chapter 1 investigates under what conditions wealthy, high-skilled landowners wind up worse off when they use housing regulations to make their communities harder for poorer, low-skill workers to move into. If there is labor complementarity in production between high-skill and low-skill workers, low-skill workers will have lower productivity when they cannot advantage themselves of neighborhood effects, which in turn will hurt high-skill workers. Chapter 2 asks whether rent control, a strong form of housing regulations, incentivizes landlords to evict their tenants when the unregulated rents rise. Exploiting a known price shock to different residential buildings throughout San Francisco over an 11 year period, I find that a 2\% increase in prices leads to a 1\% increase in the monthly probability of an eviction from a controlled unit. The analysis also highlights the perverse incentives created by rent control, that medium-term (3-5 year) market withdrawals increase when prices increase. Chapter 3 studies whether grandchildren change their grandparents' labor force participation, and then researches whether the fall and rise in labor force participation between 1970 and 2009 can be ascribed to the rise and fall in grandparenthood due largely to the Baby Boom. I find that being a grandparent lowers labor force attachment for both grandfathers and grandmothers on both the intensive and extensive margin, but that grandchildren play only a limited role in the trends in older men's labor force participation.

This dissertation contains three chapters and focuses on price discrimination and airport congestion in the U.S. airline industry.

The first chapter explores possible determinants that may affect an airline's decision to charge passengers different roundtrip fares depending on trip origin, a case of directional price discrimination. Such fare differences cannot be the result of differences in cost, as the cost of flying a roundtrip passenger does not significantly differ depending on direction. It is argued that directional fare differences result from airlines recognizing that passenger price elasticities differ between route endpoints. A price discriminating airline will then charge a higher roundtrip fare at the endpoint where the passenger price elasticity of demand is comparatively lower. Evidence is found suggesting that airlines do use differences in income to price discriminate when setting roundtrip fares. Fares are found to be $0.18-$0.43 higher on average for each $1000 difference in average per capita income between origin and destination metro areas. This finding is sensible assuming that higher incomes reduce the price elasticity of demand for air travel, with richer passengers being less sensitive to the cost of travel.

The second chapter investigates the trade-off between providing convenient flight connections for passengers and reducing airport congestion. From the passenger perspective, layovers are detrimental since the addition to total travel time relative to a nonstop itinerary is a cost incurred by the passenger. An airline is able to reduce a passenger's layover time by narrowing the gap between flights at the connecting airport. However, narrowing this flight gap has the adverse effect of increasing airport congestion. Taking these perspectives into account, it is clear that layover time influences a prospective passenger's purchasing decision and an airline's flight scheduling decision. Using published fare and itinerary data from Google Flights, this chapter provides insight into both decisions by providing empirical estimates on the value of layover time in the U.S. airline industry. Passengers are found to be compensated with a fare that is $42.74-$47.60 cheaper per hour of layover time.

The last chapter evaluates the effectiveness of slot controls (restrictions on the number of departing and arriving flights) as a congestion management policy. Utilizing the introduction of slot controls at John F. Kennedy (JFK) and Newark (EWR) airports in 2008 as a quasi-experiment, no evidence is found of a reduction in flight delays at both airports. In the months after slot controls were introduced, the average arrival delay at EWR actually increased by 7 minutes. Further, the length of Delta's departure banks (high-volume periods of departing flights) decreased by about 2 minutes at JFK while the scheduled time of EWR flights decreased by 1.5-2.2 minutes. These findings are consistent with Ater (2012), who suggested that policies aimed at reducing congestion at highly concentrated airports will only have a limited impact because dominant airlines already internalize congestion. The results highlight the need for policymakers to carefully consider how the allocation of airport slots will impact flight scheduling decisions when implementing similar policies in the future.

This dissertation will study how frictions in labor and housing markets affect outcomes in each market since labor markets and housing markets are highly frictional. The first study empirically analyzes the role that information friction plays in the housing tenure choice when households move to a new location. The results show that information friction reduces the likelihood of homeownership. The second study theoretically and quantitatively analyzes the role that search friction plays in the labor market, in particular, in the Great Divergence phenomenon. I find that the search friction in the labor market moderates the Great Divergence and provides more incentive for low-skill workers to move to productive locations. The third study examines the consequences of rent control policies on the frictional rental housing market in a search and matching framework. The model suggests that an increase in productivity growth rate would reduce the optimal occupancy duration and raise the vacancy rate. In contrast, an increase in the eviction cost would have the opposite effect.

This dissertation is comprised of three economic theory papers corresponding to its three chapters: two of them explore the effects of online interactions between firms or individuals; two provide novel explanations of how a society can become culturally polarized (one of them is in both categories).

The first chapter is titled "Online Dealers versus Brick-and-Mortar Stores: A Welfare Analysis". Online intermediaries play an increasingly important role in numerous markets. The literature on intermediation has mainly considered intermediaries as information gatekeepers, a role limited to advertising sellers' prices. This paper focuses on intermediaries as dealers or resellers, who acquire final goods through wholesale trade with producers. Consumers often believe that intermediaries can benefit them by mitigating information imperfections. But in many cases, intermediary entry actually lowers consumer surplus, and having more than one intermediary in the one-producer setting allows the monopolist producer to extract the entire consumer surplus. In all cases, however, conditions exist under which the presence of an intermediary improves overall welfare, including producer surplus.

The second chapter is titled "Cultural Polarization through Online Communication and Economic Growth". Over the past decade, people have become increasingly partisan in their political views (Stroud 2011). While a growing literature examines the relationship between media slant and polarizing views, this paper provides an explanation of cultural polarization without endogenous media bias. Whereas word-of-mouth communication combines speaking and listening, online communication through social media has decoupled interaction into the sending and receiving of messages. Consumers are influenced by the news content viewed and the messages received. When the cost of sending messages is higher, extremists have a greater influence on preference formation. Rising wages over time naturally raise the opportunity cost of sending messages, and, when combined with the decoupling of social interaction, this increase implies that we should expect to see increasing cultural polarization.

The third chapter, "Defensive Extremism: Polarization from a Concern for Balance", further examines naturally polarizing forces in society. Online communication through social media is reshaping the way people interact. While a rich literature in psychology, sociology, political science, and economics has studied many models of socialization among individuals and within groups, this paper offers a model of socialization between groups. Individuals can now easily identify others with similar views through the Internet, but at the same time, the openness of online interactions exposes people to views representing a variety of beliefs and preferences. In this model, agents choose to join a group, and each group seeks to maximize the collective utility of its members by endorsing a message that represents its views. The agents' views are updated following exposure to the messages, and changes lead to disutility. In many cases, each group chooses an extreme message relative to its members' views in order to minimize this disutility. Messages are not meant to influence the other group's members but rather to balance out the in-group's exposure to the out-group's extremism. This "defensive extremism" leads to interesting results that bolster and add to the literature's understanding of socialization and its consequences.