Three Essays in Applied Economics
AuthorFogarty, Brian Alexander
AdvisorHarris, Tom R
StatisticsView Usage Statistics
This thesis discusses three topics in applied economics. The overarching theme of these essays are to conduct statistical analysis on publicly available data to provide guidance to policymakers in both the state of Nevada and across the United States.The first essay examines the price elasticity of demand and installation size for the state of Nevada. This paper measures how changes in installation price affect installation amounts and the size of installations. Using a new approach of an Instrumental Variable Tobit model, estimates indicate that the price elasticity of demand and installation size are inelastic at all significance levels. For a 10% increase in price, installation sizes decrease by -2.895%, and installation size decreases by -1.939%. It is possible that customers who install rooftop solar view it as a long term investment and value net metering excess generation credits more important than upfront rebates. Further research should be done on what factors are most important to individuals when making the decision to install rooftop solar.The second essay examines how smoking behaviors changed during the Great Recession depending on if the individual worked in a sector that was hard hit. Current literature on how recessions affect smoking is mixed, some conclude that smoking declines while some find evidence that decreases in income lead to higher smoking rates. Using Ordinary Least Squares, Probit and Logit models as well as counterfactual simulations, the probability of smoking rose by about 2% for individuals working in construction and manufacturing. Policymakers could take these results into account when considering cutting smoking cessation funding during recessions.The third essay creates an Autoregressive Moving Average model that predicts cattle allotment levels for western states by using the Palmer Drought Severity Index. Many rural areas depend on cattle ranching, and allowing them to predict future levels of cattle allotments would better decision making with regards to forage insurance. All states have the Palmer Drought Severity Index as a significant predictor of future cattle allotments. Future research is ongoing onto predicting future Palmer Drought Severity Index values, which could potentially be incorporated into the model.