Date of Graduation

8-2019

Document Type

Dissertation

Degree Name

Doctor of Philosophy in Economics (PhD)

Degree Level

Graduate

Department

Economics

Advisor/Mentor

McGee, Peter J.

Committee Member

Gu, Jingping

Second Committee Member

Farmer, Amy

Keywords

Environmental economics; consumers' risk attitudes

Abstract

This dissertation consists of three essays of different topics in microeconomics.

Chapter 1 investigates the effect of environmental uncertainty over the issue of resource allocation in a common pool resources setting. This chapter provides a model of how agents allocate resource among abatement technology, production, and saving with an endogenously determined uncertain damage. The results of a laboratory experiment show a negative effect of uncertain damage on abatement technology adoption and a non-linear relationship between the investment in abatement technology and the self reported risk aversion. Contrary to the “common belief” that greater risk averse agents invest more in abatement technology to protect the common pool, their average investment is lower than less risk averse agents’ when the damage probability is high. The results also suggest uncertain damage from nature promotes group efficiency when the damage probability is low, but it is counterproductive when probability is high.

Chapter 2 examines the relationship of environment-production in the megacities in China, Beijing and Shanghai, with monthly data of industrial production and air quality index (AQI). It investigates the Granger-causality and estimates the Environmental Kuznets Curve (EKC) for production and AQI. While our evidence supports an inverted-N relationship between AQI and production in both cities, the pattern of Granger-causality is different. The tests of the dynamic interactions among the production from different sectors (the Primary, Secondary, and Tertiary sector) and AQI confirm this difference. These findings extend the studies of the production- pollution relationship and suggest that Beijing and Shanghai are on the development stage.

Chapter 3 studies the effect of consumers’ risk attitudes towards the product of pizza with different nutrition labels on their purchase intentions. We empirically compare the effect of the Traffic Light (TL) with the icon only nutrition label on participants’ risk attitudes and riskperception linked to their purchase intention in a product of pizza. The findings from the online experiment show that shoppers’ attitude toward the products mediates the effect of TL nutrition label on purchase intention. Moreover, both the direct and indirect effect from TL are moderated by the individuals’ health risk perception; that is, the effect is different among risk perception levels.

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