Date of Award
Spring 2023
Document Type
Dissertation
Degree Name
Doctor of Philosophy (PhD)
Department
Economics
First Advisor
Arkolakis, Costas
Abstract
This dissertation examines the impact of emerging technologies on the reduction of spatial barriers and its consequent effects on consumer welfare, firm strategy, and regional development. Specifically, Chapters 1 and 2 investigate the rise of e-commerce, while Chapter 3 examines the implications of the High-Speed-Railway (HSR). Chapter 1 studies how the growth of e-commerce has altered consumer welfare and its distributional implications in the context of retail oligopoly. We use novel shopping receipt data to demonstrate consumer heterogeneity in online retailing markets, with households in rural areas and higher income brackets being more likely to shop online. To assess the welfare effects, we exploit an exogenous tax shock from the Supreme Court's Wayfair Decision to learn about online store substitutability and firm pricing responses. We then develop and estimate a structural demand and supply model that focuses on the pet food retail market. By doing so, we can decompose consumer online welfare gains into gains from product variety (9%) and convenience (5%) as well as gains from pro-competitive effects (3%). We further examine the distributional consequences of e-commerce's growth and find evidence of reduced consumption inequality between rural and urban areas, yet increased inequality between the rich and the poor. In Chapter 2, I investigate the long-term impact of the rise of e-commerce on the closure of physical retail stores. Retail establishments in space are critical decisions for firms in the retail market. The rise of e-commerce in recent years has led to the displacement of many offline stores, but the precise mechanisms by which this affects the equilibrium number of stores are not well understood. In this paper, I investigate the direct effect of the rise of e-commerce on the closure of retail branches, as well as its indirect propagation through agglomeration and congestion forces within the retail landscape. To do so, I develop a demand and supply model that accounts for spillovers and unifies various agglomeration and congestion forces discussed in the literature. By examining variations in retailers' exposure to online competition, I disentangle the spillover forces affecting demand and supply. My estimation results demonstrate that agglomeration and congestion forces both exist and are of comparable quantitative importance. Moreover, I show that by combining observed data with spillover parameters, we can separate the direct and indirect effects of e-commerce on the equilibrium store landscape. I analyze the welfare implications of this shift for both consumer welfare and retailer surplus. Chapter 3 examines human mobility and regional development through the lens of HSR. Human mobility across cities is a crucial factor for regional development, yet its effects and mechanism remain poorly understood due to limited data on travel flows and their mixed purposes. This paper addresses this gap by using high-frequency GPS data from mobile users in China to measure travel flows across cities and to disentangle business and leisure activities, which have different implications for regional structural change. Furthermore, I develop a multi-sector economic geography model with both trade in goods and travel in humans to examine the welfare effects of China's recent expansion of the HSR since it only reduces people's travel costs, not goods' trade costs. The model suggests travel flows and their sensitivity to spatial functions are sufficient to evaluate welfare. I estimate the human mobility aspect of infrastructural improvement contributes to 0.3 percent of GDP. I also find significant inequality in the gains of HSR across cities and industries. These results have important implications for the ongoing policy debate on infrastructure improvement.
Recommended Citation
He, Zijian, "Essays in Urban and Spatial Economics" (2023). Yale Graduate School of Arts and Sciences Dissertations. 939.
https://elischolar.library.yale.edu/gsas_dissertations/939
