THREE ESSAYS ON REGIONAL POLICY ANALYSIS AT DIFFERENT REGIONAL SCALES WITH VARIOUS METHODOLOGICAL APPROACHES

Abstract

Regional policy analysis requires an appropriate method that is tailored to a specific region because of differences in demographics, policy purpose, and the direction of policy. Each policy can be analyzed through different methods or viewpoints on how to approach the problem. This dissertation attempts to narrow the literature gap by developing computational tools to analyze regional policy at different regional scales. This dissertation includes three essays on different policy issues, each of which is analyzed using a different method. In the first chapter, for which the regional scope is the county, I investigate the impact of tax incentive policy using an agent-based modeling (ABM) approach. In 2013, Governor Cuomo introduced the policy START-UP NY (New York), designed to create more jobs by helping people start or move their qualified business into tax-free zones. Measuring the impact of START-UP NY, however, is difficult because the data are not yet available for causal inference purposes. The agent-based model developed for this chapter is designed to simulate the impact of START-UP NY on the local economy of Tompkins County. The simulation results show that ensuring a stable demand for firms’ output is more critical for firms to survive than the kind of tax exemptions offered by START-UP NY. The second chapter expands the regional size to the national level and analyzes the impact of reducing military expenditures using a computable general equilibrium (CGE) model. Military spending is an essential budget item because it is directly related to national security. Unlike the literature, this thesis does not analyze the relationship between defense expenditures and economic development. Instead, I develop a CGE model to analyze how various industries are affected by defense expenditures, and to identify industries for which increased government expenditures would improve household wellbeing when defense expenditures are reduced. The final chapter analyzes international regional policy to explore the relationship between peace and trade using a structural equation modeling (SEM) approach. In this paper, I explore the impact of peace on trade and vice versa using a SEM approach. I conduct a SEM analysis using the Militarized Interstate Dispute dataset. I propose two latent variables—peace and trade—to investigate the relationship between the latent variables and the indicators. I found that there is a reciprocal effect between peace and trade. In addition to analyzing the relationship between trade and peace, I extend the dataset to include observations up to 2010, which has not been done before. I show using the new dataset that the relationship between trade and peace has remained stable in the decades between 1990 and 2010.