Three Essays on Contemporary Issues in Climate Change and Urban Development
The first paper contributes to the existing literature which looks at the effects of rising temperatures on energy demand, more specifically household energy consumption. We use a novel methodology to isolate extensive margin adjustments made in response to a changing climate from the intensive margin adjustments made in response to changes in weather. By controlling for both the contemporaneous temperature distribution as well as the lagged moving average, we are gaining on two fronts. Firstly, we are able to get more precise estimates of the effect of short-run changes in weather on residential energy consumption. Secondly, by comparing the two effects, we are able to back out the extensive margin effects on residential energy consumption made in response to changes in longer term climate. Our estimates imply significant impacts for both the intensive and the extensive margins and a U-shaped response function of residential energy consumption with respect to contemporaneous temperature. Rising income inequality is a cause of concern for policy makers in many developed and developing countries. Another concern in several developing countries is the rise in informal settlements. This second paper attempts to connect the two and see if rising income inequality contributes to the problem of rising informal settlements. We model informal settlements explicitly and show that having more than two income groups matter in our set up. We find that rising income inequality does contribute to the welfare of the poor in a negative way and also leads to a rise in number of informal settlers, hence contributing to the existing problem. We extend the model further to incorporate tax on housing in the formal sector and tax revenue going into the provision of public utilities in the informal sector and look at the effects of rising income inequality. We also look at movements of households across sectors and find interesting implications of these to the city equilibrium. The third paper uses the monocentric city model set up and enhances the model to include for different types of housing and differences in their respective construction costs. We show the importance of these features by comparing the equilibrium to a situation where these features were not there. We find interesting implications of the new features of the model on the city equilibrium. We show that having the highest bid-rent does not ensure a household a house in that place. We also do some comparative static analysis and show how changes in construction costs changes the equilibrium of the city.
Economics; Environmental economics
Bento, Antonio Miguel R.Kanbur, Ravi
PHD of Economics
Doctor of Philosophy
dissertation or thesis