UCLA

This thesis consists of three chapters and covers topics in Energy Economics, Environmental Economics, and Labor Economics. The first chapter estimates the demand and supply functions of rooftop solar panels in California using a rebate program called the California Solar Initiative (CSI). Accurately estimating demand and supply is crucial for evaluating previous incentive programs and guiding future ones. I estimate the demand elasticity in California to be -3.284 and the supply elasticity to be 5.572. My contribution to the literature is a new method of using rebates as a source of exogeneous change to estimate both demand and supply functions simultaneously. I analyze disaggregated data at the Zipcode-month level, and I use a two-part model to incorporate large amounts of Zipcode-months with no solar panel installations. The second chapter is a joint work with Professor Edward Leamer and Jonathan Gu. We study the impact of Pasadena minimum wage on earnings, employment, and number of establishment. We use data from the individual zipcodes within and around Pasadena to conduct analysis. We find evidence of a positive impact of California/Pasadena minimum wages on the earnings of restaurant workers and of other low wage industries. Our model implies that a minimum wage increase of 10% would increase the average quarterly earnings per worker in limited-service restaurants by 8% and in full-service restaurants by 5%. Impact of minimum wage on employment and number of firms are less pronounced. The third chapter studies the impact of a Chinese environmental policy: Two-Control Zone(TCZ). I answer three questions in this study: One, has the TCZ policy been effective in reducing industrial emissions? Two, how has the TCZ policy affected economic activities? And three, how has the TCZ policy affected industry composition? To unpack these issues, I investigate whether a city designated as TCZ improved its environmental performance, city-level GDP growth, and level of foreign direct investment; had higher industrial output; and saw changes in industry composition. Using propensity-score matching to solve the possible endogeneity problem, I find evidence that TCZ cities had 5% lower ambient pollution from 2000 to 2012. During the same period, the TCZ policy caused 8% lower GDP growth and almost 3% less new foreign direct investment in TCZ cities compared to non-TCZ cities.