Job Market Paper

The Local Consequences of Federal Mandates: Evidence from the Clean Water Act”  

This paper estimates, first, how local governments finance federal mandates and, second, how much value local residents place on mandated local spending using a change in federal rules on municipal infrastructure following the 1972 Clean Water Act (CWA). I leverage the role of river networks in distributing pollutants across cities, combined with pre-CWA state regulatory intensity, to account for the endogeneity of municipal infrastructure adoption decisions, and to predict ex ante compliance with the CWA infrastructure mandate. Cities under the burden of compliance experienced substantial improvements to local ambient water quality as well as a three-fold increase in resident fees. Public spending on non-mandated items did not change, indicating that mandates are unlikely to displace local funding of other goods and services. The simultaneous increases to water quality and local costs resulted in taste-based sorting. However, I find that resident value of the mandated infrastructure depends upon the complementarity of surface water quality to pre-existing local features, as well as exposure to upstream polluters. These results imply that mandates may reduce inefficiencies to local public goods provision and provide positive benefits that are valued no less than their costs to local residents.

Published Papers

The Efficiency of Local Government: The Role of Privatization and Public Sector Unions” with Matthew E. Kahn and Shanjun Li (Journal of Public Economics (2017), 154: 95-121)

Selected press coverage: Forbes

Local governments spend roughly $1.6 trillion per year to provide a variety of public goods ranging from police and fire protection to public schools and public transit. Despite the fact that a sizable amount of economic activity is supplied by local governments, we know little about this sector’s productivity in delivering key services. We argue that the operating cost of providing public transit bus miles offers a standardized output for benchmarking the cost of local government service provision both over time and across space. We measure the cost savings from privatization and study the cost premium associated with unionization. We explore the political economy of why privatization rates are lower in high cost unionized areas.

Working Papers

“The Spatial Impacts of Transit Policies: Evidence from Beijing’s Housing Market” with Panle Barwick, Shanjun Li, Jing Wu, and Dengh Yongheng

Since 2002, the Beijing government has implemented various transit policies in an effort to combat traffic congestion and air pollution. This paper utilizes Beijing’s city-wide driving restriction as a source of variation in the housing price-subway proximity gradient in order to identify a key economic parameter: the value individuals place on their time. We measure the value of time as the premium individuals are willing to pay for a housing location that reduces their walking time to subway stations. We find that the driving restriction significantly increased the demand and price of housing near subway stations, with distributional consequences for lower-income residents. Finally, our estimates suggest the value of time in Beijing is roughly equal to the buyers’ mean wage.

Works in Progress

“Determinants of the Gender-Commute Gap among Married Couples in Beijing” with Shanjun Li and Jing Wu

“Why do Low Skill workers Live in ‘Superstar’ Cities?” with Caitlin Gorback