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Document Type

Open Access Dissertation

Degree Name

Doctor of Philosophy (PhD)

Degree Program

Economics

Year Degree Awarded

2015

Month Degree Awarded

September

First Advisor

Nancy Folbre

Second Advisor

Arindrajit Dube

Third Advisor

James Kitts

Subject Categories

Economics

Abstract

Many privately-owned items are somewhat non-rival in consumption, so there are often benefits to borrowing and lending underutilized goods and exchanging used goods. Although sharing is ubiquitous, it is understudied in economics. This dissertation seeks to help develop an economics of sharing. Chapter 1 presents a simple mathematical model of the “gains from sharing”, which connects the literatures on club goods, household economies, collective action, community governance, and decentralized cooperation. I argue that the level of sharing in society depends not just on technology but also on the norms that govern how people cooperate, on people’s preferences around privacy and independence, and on economies of scale in matching people with underutilized goods. Since institutions that facilitate new forms of sharing are still gaining users, experimenting with rules and etiquette, and developing tastes for peer-to-peer interactions, the level of sharing is likely to increase in the years to come. Chapter 2 investigates the current and potential value of sharing goods across households. Analyzing unique data from the online platform NeighborGoods, I find that the level of sharing among relatives, friends and neighbors makes informal borrowing and lending an important component of inter-household cooperation. The potential gains from sharing are even larger. My investigation of consumer expenditures reveals that the average household spends over $9,000 a year on goods that could, in principle, be shared across households. Given the large sums of money Americans spend on private vehicles, the greatest opportunities may be in increased ride-sharing and car-sharing. Finally, I address the relationship between income and sharing. Although traditional methods of sharing goods are disproportionately used by low-income people, I find that people of all incomes are equally likely to use new institutions for sharing goods, such as Craigslist, Airbnb, and Zipcar. This suggests that new forms of sharing may maintain their popularity as incomes rise in the long run. Chapter 3 studies the effect of Craigslist’s market for secondhand goods on solid waste generation. Economic theory suggests that falling transaction costs may increase incentives for owners to sell goods on secondhand markets and for buyers to purchase used goods instead of new goods. I use difference-in-difference methods to estimate Craigslist’s effect on waste by exploiting a natural experiment in how the platform expanded across California and Florida between 1996 and 2009. My results provide evidence that Craigslist led to substantial reductions in waste generation. This paper suggests that other online platforms may similarly generate economic as well as environmental benefits.

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