Essays in Applied Microeconomics

First chapter studies the impacts of large natural disasters such as earthquakes, floods and storms have on economic activity by using nighttime light intensity data. On a local level, using the data of three large earthquakes within a 200-mile radius from the earthquake’s epicenter, I found that when the distance from the epicenter increases, the nighttime light intensity decreases. By using the synthetic control approach, on a national level, I found that while three of nine large natural disasters have a positive impact on economic activity, one natural disaster has a negative impact. When aggregating all nine large natural disasters, I found a small but positive impact on economic activity that vanishes in four to five years. Second chapter analyzes the impacts of time zone boundaries on school performance for elementary, middle and high schools in the U.S. Sharp discontinuity in time introduced by time zone boundaries creates more sleep and more evening time on the west side of the time zone boundary. By using the regression discontinuity method, I found that schools on the west side of the time zone boundary have higher average scores than the schools on the east side. Results are robust to different bandwidth selections and different model specifications. Third chapter analyzes political favoritism under different government types (i.e., coalition and one-party government) by using nighttime light intensity as a proxy for economic activity. Decision makers have different objectives when allocating a country’s resources. To secure a spot in government, decision makers in the political party in power might try allocating resources to win more votes in future elections. Results show that during a coalition government, cities that have mayors whose political party is aligned with one of the political parties in the coalition have more economic activity, while during the one-party government era, cities with aligned mayors have less economic activity.