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Three Essays on Environmental Economics

  • Author(s): Xie, Lunyu
  • Advisor(s): Berck, Peter
  • et al.
Abstract

Environmental issues have large impacts on both developed and developing economies. In this dissertation, I focus on three environmental issues, assess their impacts, and evaluate the effectiveness of related remedies, using both ex-post evaluation and ex-ante forecasting methods.

Using individual travel diary data collected before and after the rail transit coverage expansion in urban Beijing, the first chapter estimates the impact of rail accessibility improvement on the usage of rail transit, automobiles, buses, walking, and bicycling, measured as percent distance traveled by each mode in an individual trip. My results indicate that the average rail transit usage significantly increased, by 98.3% for commuters residing in the zones where the distances to the nearest station decreased because of the expansion, relative to commuters in the zones where the distances did not change. I also find that auto usage significantly decreased, by 19.8%, while the impact on bus usage was small and not statistically significant. Average walking and bicycling distance (combined) increased by 11.8%, indicating that walking and bicycling are complements to urban rail transit, instead of substitutes. Furthermore, I find that estimated changes in auto usage and rail transit usage vary significantly with auto ownership and income.

Based on a coauthored paper with Peter Berck and Jintao Xu, the second chapter studies the collective forest tenure reform in China. In this reform, the Chinese government allowed collective village forest land to pass into individualized ownership. The government's purpose was to alleviate rural poverty, stimulate investment in forests, and improve forest conservation. Using data collected from 288 villages, in eight provinces, over three years, this chapter measures the effect of the individualization on one aspect of forest investment, forestation. Because villages voted on the reform, we identify the causal effect of the reform by an instrumental variable estimator based on the countywide decision to offer the reform package. We find an increase in forestation of 7.87% of forest land in the year of the reform, and no significant change in harvesting. It implies that the individualization of the village forestlands is on track to meet the societal goals concerning forest conditions.

The third chapter is based on a coauthored paper with Sarah Lewis, Maximilian Auffhammer, and Peter Berck. In this chapter, we study crop coverage adaption to climate change. In the face of warming weather, famers may grow different crops that better fit in the new landscape. This type of adaptation may offset the negative effects of climate change. However, adaptation may be restricted by soil conditions, which determine crop yields and whether the substitution crops could fit in. The feasible amount of adaptation could be small, even in the face of substantial warming. Therefore, the negative effects of climate change can be offset only to a limited extent. In this paper, we pair a 10-year panel of satellite-based crop coverage and soil data with a fine-scale weather data set that incorporates the whole distribution of temperatures within each day and across all days in the 10-year period. Combining a proportion type model with local regressions, we simultaneously address the econometric issues of proportion dependent variables and spatial correlation of unobserved factors. Based on the estimates of crop choices, we predict future crop maps under several climate change scenarios. We find that rice and cotton spread toward the north, corn share increases, and soy share decreases on average. We also find that crop shifting patterns vary across quality levels of soils. There is less crop adaptation on better soils than on soils with lower quality.

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