Three Essays in Microeconomics

Abstract

In this series of essays, I apply the tools of economics to a variety of real world problems. The first essay looks at the impact of a gun control regulation on mortality and crime. A third of US states have removed all restrictions on carrying concealed handguns. This might decrease crime by invisibly arming law-abiding citizens, or increase it by eliminating penalties for criminals. It could have no effect at all, because handguns are easily hidden, so anyone who wished to carry a gun was already doing so. I compare counties along the borders of states that liberalized concealed carry to contiguous counties in neighboring states that did not, using mortality and crime micro-data. I find that deregulation had no impact on homicide, violent crime, firearm mortality, firearm usage, or firearm ownership. The second essay, co-authored with Sajala Pandey, looks at the impact of an earthquake in Nepal on child development. Biologists have posited that prenatal maternal stress (PNMS) has an adverse impact on child development, possibly via the process of epigenetic imprinting which occurs during the first trimester. Researchers have attempted to study this link by using natural disasters as a source of exogenous variation. A shortcoming of these studies is that natural disasters may also affect prenatal healthcare provision, either by decreasing it’s provision (due to infrastructure being destroyed) or increasing it (thanks to aid flowing into the region.) We look at the impact of 2015 Earthquake in Nepal on children who were (a) in utero at the time of the earthquake and (b) in areas severely affected by it. Consistent with theories from PNMS, we find that the earthquake adversely impacted their height-for-age, and the effects were concentrated on individuals who were in the first trimester of gestation. These negative effects were entirely offset by an increase in the consumption of antenatal healthcare. We find that the earthquake resulted in a improvement in development indicators for those children who were in severely affected areas but not in-utero at the time of the earthquake, highlighting the importance of healthcare provision in early childhood. The third essay, co-authored with Andrew Copland, proposes a solution to the problem of assigning multiple scarce goods to agents in the absence of prices, for example assigning seats in courses to students in a university. Students submit a list of preferences over courses, a lottery for rankings is held, and an algorithm allocates each student their top available course, reversing their ranks at the end of each round. Then, for each student, the algorithm compares their outcomes to the outcomes generated by every alternative ordering they could have set. Whenever such revisions result in more preferred outcomes, their preferences are replaced with the alternative. Our solution is non-dictatorial and Pareto optimal. When it converges without encountering a loop, it is strategy-proof. It retains properties even in small economies. We compare our algorithm to alternatives.