Book Chapters
Sub-National Governmental Budget Tools for Surviving Shocks: Resiliency in the Public Sector (with Steven Craig)
in Resilience and Regional Development
(with Gabriela C. Pascariu, Karima Kourtit, Peter Nijkamp, and Ramona Tiganasu (eds), Routledge)
Working Papers
Job Market Paper
Conference Presentations:
MVEA (2021), SEA (2021), MVEA (2022), SEA (2022), CEANA (2022), ASSA (2023), Indiana University-SPEA (2023), STATA poster (2023), NTA (2023), WRSA (2024), ABFM (2024)
Dealing with Fiscal Stress: Cities versus Suburbs [Draft]
(Under Review)
Abstract: I explore how changes in the local economic environment affect the provision of public goods by local governments through two approaches to shocks: import shocks from China and changes in the manufacturing industry in the United States. I extend the Feler and Senses (2017) framework about import shocks to allow for a more extensive analysis of heterogeneity and find that aggregation affects their results in two critical dimensions. Governments in urban areas responded differently than those in the remaining, presumably because of Tiebout competition between cities and comparable competitive suburbs. Further, I find that central cities in the largest commuting zones respond to this decline by reducing their investment spending, preparing for further economic decline. The suburbs, in contrast, appear to recognize that the reduction is temporary, as the continued decentralization of large urban areas suggests a suburban recovery from the temporary decline. I also show that the Bartik-type instrument for manufacturing industry changes yields results similar to the China shock approach and has the advantage of being able to cover more time periods.
Suburbanization in All CZs
Source: Census Bureau's Population and Unit Estimates Survey
Suburbanization in Top Quartile CZs
Source: Census Bureau's Population and Unit Estimates Survey
China Import Shocks in Top Quartile CZs
Source: United Nations Comrade Database
Manufacturing Industry Changes in Top Quartile CZs
Source: County Business Pattern
Expenditure Smoothing with Balanced Budget Rules: U.S. State Governments 1975-2014
(with Xavier Martin Bautista, Steven Craig, Bent Sørensen, Vasundhara Tanwar and Priyam Verma) [Draft] (Under Review)
Conference Presentations: MVEA(2019), Midwest Macro Conference(2019), World Econometric Society Meetings(2020), SEA(2020), WRSA(2021)
Abstract: U.S. state governments are subject to balanced budget rules, but most have ``rainy day funds,'' which are dedicated savings to be used in economic downturns. However, the balances are small relative to fluctuations in revenue. Using data on state finances from the Census Bureau, we find that state governments maintain other cash accounts which are much larger than the rainy day funds and absorb shocks through pro-cyclical balances. We ask if state governments save rationally in the sense that spending and savings of a representative state can be described by a buffer-stock consumer model, see Carroll(1997). We estimate the parameters using indirect inference and find that state governments are risk averse and impatient, with the estimated parameters similar to those found for consumers.
Natural Disasters and Willingness to Pay for Reliable Electricity: The 2021 Winter Storm in Texas as a Natural Experiment
(with Gail J. Buttorff, Yewande Olapade, Maria P. Perez Arguelles, Pablo M. Pinto, Savannah L. Sipole, Agustin Vallejo, and M. C. Sunny Wong)
[Draft] (Under Review)
Conference Presentations: MPSA(2022), WEA(2022)
Abstract: Winter Storm Uri led to power outages in many Texas households in February 2021, unveiling crucial deficits in the state's electricity grid. We exploit this exogenous shock and natural experiment, which as-if randomly assigned outage duration, to analyze how individuals' differential experiences with power outages affect their willingness to pay (WTP) for policies aimed at increasing the reliability of the supply of electricity. We find that respondents who experienced longer than average outage were willing to pay 2 cents more per kWh to winterize compared to 4 and 4.4 cents more, respectively, for those that experienced no or shorter than average outage. We further find that the length of the outages is associated with a higher probability of blaming the government and electricity producers for lack of oversight and weatherization.
Work in Progress
Rent Capture by Central Cities (with Steven Craig, Janet Kohlhase, and Oscar Galvez-Soriano)
Conference Presentations: WRSA(2022)
Abstract: We estimate whether decisions by local governments in surrounding suburbs affect the behavior of local governments in central cities. Central city governments have access to substantial land rents, but suburban local governments do not. Using panel data of Top 50 biggest cities in the United States over 27 years, we apply the Bartik IV empirical strategy to examine the central city's responses are a function of the choices of suburban governments. We see that central cities are generating a negative fiscal surplus in response to suburban innovations. This implies the extraction of rent by the central cities.
Metropolitan Fragmentation and Transportation Investment (with Steven Craig)
Abstract: I empirically test whether and to what extent metropolitan fragmentation contributed to the perceived investment shortfalls in transportation in the United States. Metropolitan areas comprise a central city and several politically independent suburban governments. Transportation networks allow for mobility between independent suburbs and the central city, and the exclusion of suburban governments in central city transportation planning causes the central cities to under-invest.