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THREE ESSAYS ON INDUSTRIAL ORGANIZATION AND NATURAL RESOURCE ECONOMICS
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Abstract
In this dissertation, I combine theoretical and empirical work to analyze policy issues with direct application to developing countries. The dissertation is divided in three essays that contribute to the fields of Industrial Organization, and Resource Economics. The first essay studies the location decisions of the Chilean aquaculture industry by using a model of the store location decision from the Industrial Organization literature. I use data to estimate a model to evaluate operation restrictions that should result in better environmental and economic performance of the industry. My results show that an improvement of the Chilean aquaculture industry's profit requires a substantial reduction of the operative fish farms in order to reduce the negative externalities related to spatial congestion. Abstract The second essay investigates the problem of choosing environmental regulations for the control of a multilateral, spatially heterogeneous pollution externality. There are three sources of inefficiency in this problem; the number of firms, their locations and their production/emissions levels. We examine the relative performance of second-best policies that control one or two of the sources of inefficiency while leaving the other one or two sources uncontrolled. This study finds that a policy of optimally chosen individual quotas by themselves perform very poorly, because they encourage excessive entry. Combining individual quotas with an optimal entry restriction performs significantly better. Spatially differentiated taxes alone perform very well, because they partially address both the entry and location sources of inefficiency in addition to limiting pollution. It is also argued that the welfare losses associated with even simpler policies like zoning restrictions or homogeneous taxes may not be high enough to justify the additional implementation difficulties associated with theoretically more efficient policies. Abstract The third essay studies regulatory enforcement in developing countries by using a novel pan-India market sales data of banned medicines from 0.75 million pharmacists and chemists in India. This study finds that indeed such medicines get sold in India even after bans are imposed on them in the period 2007 to 2013. However, there is a general decline in demand post ban for our focal molecules suggesting broad adherence to bans. We observe regional heterogeneity in the prevalence of banned medicines sold between rich and poor regions of India with the former counterintuitively showing more sales. A regression-based examination suggests that prior firm presence in therapeutic markets and the popularity of molecules positively impact the likelihood of sales of banned medicines in India. These results are robust to alternative explanations and are substantiated with a simple theoretical set up that reconciles the profitability in selling banned medicines with the costs accrued by firms from the probability of getting caught. India has recently been under the lens of the global access to medicines debate and our results have important policy implications for global health.
Type
campusfive
dissertation
dissertation
Date
2021