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Institutional Affiliation: Jinan University
NBER Working Papers and Publications
|August 2020||Frictional Sorting|
with , : w27643
In many countries around the world, migration costs and housing supply restrictions interact with each other and combine to restrict workers’ location decisions. Using an equilibrium sorting model and rich micro data from China, we evaluate the impacts of these dual constraints on workers’ sorting behavior and quantify the resulting changes in aggregate welfare and inequality. We find strong policy interactions between the two kinds of frictions in determining welfare losses and regional inequality. Counterfactual simulations show that lowering migration costs can increase welfare and reduce regional inequality by moving workers from unproductive inland regions to productive coastal regions in China; such welfare and regional distributional impacts depend on the elasticity of housing supp...
|December 2017||Willingness to Pay for Clean Air in China|
with , , : w24157
We develop a residential sorting model incorporating migration disutility to recover the implicit value of clean air in China. The model is estimated using China Population Census Data along with PM2.5 satellite data. Our study provides new evidence on the willingness to pay for air quality improvement in developing countries and is the first application of an equilibrium sorting model to the valuation of non-market amenities in China. We employ two novel instrumental variables based on coal-fired electricity generation and wind direction to address the endogeneity of local air pollution. Results suggest important differences between the residential sorting model and a conventional hedonic model, highlighting the role of moving costs and the discreteness of the choice set. Our sorting resu...
Published: Richard Freeman & Wenquan Liang & Ran Song & Christopher Timmins, 2019. "Willingness to pay for clean air in China," Journal of Environmental Economics and Management, . citation courtesy of