Essays in environmental economic valuation and decision making in the presence of an environmental disaster

The first essay developed a respondent model of Bayesian updating for a double-bound dichotomous choice (DB-DC) contingent valuation methodology. I demonstrated by way of data simulations that current DB-DC identifications of true willingness-to-pay (WTP) may often fail given this respondent Bayesian updating context. Further simulations demonstrated that a simple extension of current DB-DC identifications derived explicitly from the Bayesian updating behavioral model can correct for much of the WTP bias. Additional results provided caution to viewing respondents as acting strategically toward the second bid. Finally, an empirical application confirmed the simulation outcomes. The second essay applied a hedonic property value model to a unique water quality (WQ) dataset for a year-round, urban, and coastal housing market in South Florida, and found evidence that various WQ measures affect waterfront housing prices in this setting. However, the results indicated that this relationship is not consistent across any of the six particular WQ variables used, and is furthermore dependent upon the specific descriptive statistic employed to represent the WQ measure in the empirical analysis. These results continue to underscore the need to better understand both the WQ measure and its statistical form homebuyers use in making their purchase decision. The third essay addressed a limitation to existing hurricane evacuation modeling aspects by developing a dynamic model of hurricane evacuation behavior. A household's evacuation decision was framed as an optimal stopping problem where every potential evacuation time period prior to the actual hurricane landfall, the household's optimal choice is to either evacuate, or to wait one more time period for a revised hurricane forecast. A hypothetical two-period model of evacuation and a realistic multi-period model of evacuation that incorporates actual forecast and evacuation cost data for my designated Gulf of Mexico region were developed for the dynamic analysis. Results from the multi-period model were calibrated with existing evacuation timing data from a number of hurricanes. Given the calibrated dynamic framework, a number of policy questions that plausibly affect the timing of household evacuations were analyzed, and a deeper understanding of existing empirical outcomes in regard to the timing of the evacuation decision was achieved.

Three essays on labor liberalization and its effects on world economy

This dissertation consists of three theoretical essays on immigration, international trade and political economy. The first two essays analyze the political economy of immigration in developed countries. The third essay explores new ground on the effects of labor liberalization in developing countries. Trade economists have witnessed remarkable methodological developments in mathematical and game theoretical models during the last seventy years. This dissertation benefits from these advances to analyze economic issues related to immigration. The first essay applies a long run general equilibrium trade model similar to Krugman (1980), and blends it with the median voter ala-Mayer (1984) framework. The second essay uses a short run general equilibrium specific factor trade model similar to Jones (1975) and incorporates it with the median voter model similar to Benhabib (1997). The third essay employs a five stage game theoretical approach similar to Vogel (2007) and solves it by the method of backward induction. The first essay shows that labor liberalization is more likely to come about in societies that have more taste for varieties, and that workers and capital owners could share the same positive stance toward labor liberalization. In a dynamic model, it demonstrates that the median voter is willing to accept fewer immigrants in the first period in order to preserve her domestic political influence in the second period threatened by the naturalization of these immigrants. The second essay shows that the liberalization of labor depends on the host country's stock and distribution of capital, and the number of groups of skilled workers within each country. I demonstrate that the more types of goods both countries produce, the more liberal the host country is toward immigration. The third essay proposes a theory of free movement of goods and labor between two economies with imperfect labor contracts. The heart of my analysis lies in the determinants of talent development where individuals' decisions to emigrate are related to the fixed costs of emigration. Finally, free trade and labor affect income via an indirect effect on individuals' incentives to invest in the skill levels and a direct effect on the prices of goods.

Essays on international lending and increasing returns to scale

Standard economic theory suggests that capital should flow from rich countries to poor countries. However, capital has predominantly flowed to rich countries. The three essays in this dissertation attempt to explain this phenomenon. The first two essays suggest theoretical explanations for why capital has not flowed to the poor countries. The third essay empirically tests the theoretical explanations.^ The first essay examines the effects of increasing returns to scale on international lending and borrowing with moral hazard. Introducing increasing returns in a two-country general equilibrium model yields possible multiple equilibria and helps explain the possibility of capital flows from a poor to a rich country. I find that a borrowing country may need to borrow sufficient amounts internationally to reach a minimum investment threshold in order to invest domestically.^ The second essay examines how a poor country may invest in sectors with low productivity because of sovereign risk, and how collateral differences across sectors may exacerbate the problem. I model sovereign borrowing with a two-sector economy: one sector with increasing returns to scale (IRS) and one sector with diminishing returns to scale (DRS). Countries with incomes below a threshold will only invest in the DRS sector, and countries with incomes above a threshold will invest mostly in the IRS sector. The results help explain the existence of a bimodal world income distribution.^ The third essay empirically tests the explanations for why capital has not flowed from the rich to the poor countries, with a focus on institutions and initial capital. I find that institutional variables are a very important factor, but in contrast to other studies, I show that institutions do not account for the Lucas Paradox. Evidence of increasing returns still exists, even when controlling for institutions and other variables. In addition, I find that the determinants of capital flows may depend on whether a country is rich or poor.^

Dynamic modeling and analysis of single-stage boost inverters under normal and abnormal conditions

Inverters play key roles in connecting sustainable energy (SE) sources to the local loads and the ac grid. Although there has been a rapid expansion in the use of renewable sources in recent years, fundamental research, on the design of inverters that are specialized for use in these systems, is still needed. Recent advances in power electronics have led to proposing new topologies and switching patterns for single-stage power conversion, which are appropriate for SE sources and energy storage devices. The current source inverter (CSI) topology, along with a newly proposed switching pattern, is capable of converting the low dc voltage to the line ac in only one stage. Simple implementation and high reliability, together with the potential advantages of higher efficiency and lower cost, turns the so-called, single-stage boost inverter (SSBI), into a viable competitor to the existing SE-based power conversion technologies.^ The dynamic model is one of the most essential requirements for performance analysis and control design of any engineering system. Thus, in order to have satisfactory operation, it is necessary to derive a dynamic model for the SSBI system. However, because of the switching behavior and nonlinear elements involved, analysis of the SSBI is a complicated task.^ This research applies the state-space averaging technique to the SSBI to develop the state-space-averaged model of the SSBI under stand-alone and grid-connected modes of operation. Then, a small-signal model is derived by means of the perturbation and linearization method. An experimental hardware set-up, including a laboratory-scaled prototype SSBI, is built and the validity of the obtained models is verified through simulation and experiments. Finally, an eigenvalue sensitivity analysis is performed to investigate the stability and dynamic behavior of the SSBI system over a typical range of operation. ^

Tubular and sector heat pipes with interconnected branches for gas turbine and/or compressor cooling

Designing turbines for either aerospace or power production is a daunting task for any heat transfer scientist or engineer. Turbine designers are continuously pursuing better ways to convert the stored chemical energy in the fuel into useful work with maximum efficiency. Based on thermodynamic principles, one way to improve thermal efficiency is to increase the turbine inlet pressure and temperature. Generally, the inlet temperature may exceed the capabilities of standard materials for safe and long-life operation of the turbine. Next generation propulsion systems, whether for new supersonic transport or for improving existing aviation transport, will require more aggressive cooling system for many hot-gas-path components of the turbine. Heat pipe technology offers a possible cooling technique for the structures exposed to the high heat fluxes. Hence, the objective of this dissertation is to develop new radially rotating heat pipe systems that integrate multiple rotating miniature heat pipes with a common reservoir for a more effective and practical solution to turbine or compressor cooling. In this dissertation, two radially rotating miniature heat pipes and two sector heat pipes are analyzed and studied by utilizing suitable fluid flow and heat transfer modeling along with experimental tests. Analytical solutions for the film thickness and the lengthwise vapor temperature distribution for a single heat pipe are derived. Experimental tests on single radially rotating miniature heat pipes and sector heat pipes are undertaken with different important parameters and the manner in which these parameters affect heat pipe operation. Analytical and experimental studies have proven that the radially rotating miniature heat pipes have an incredibly high effective thermal conductance and an enormous heat transfer capability. Concurrently, the heat pipe has an uncomplicated structure and relatively low manufacturing costs. The heat pipe can also resist strong vibrations and is well suited for a high temperature environment. Hence, the heat pipes with a common reservoir make incorporation of heat pipes into turbo-machinery much more feasible and cost effective.

Essays on Competition in the Pharmaceutical Industry

Chapter 1: Patents and Entry Competition in the Pharmaceutical Industry: The Role of Marketing Exclusivity Effective patent length for innovation drugs is severely curtailed because of extensive efficacy and safety tests required for FDA approval, raising concern over adequacy of incentives for new drug development. The Hatch-Waxman Act extends patent length for new drugs by five years, but also promotes generic entry by simplifying approval procedures and granting 180-day marketing exclusivity to a first generic entrant before the patent expires. In this paper we present a dynamic model to examine the effect of marketing exclusivity. We find that marketing exclusivity may be redundant and its removal may increase generic firms' profits and social welfare. Chapter 2: Why Authorized Generics?: Theoretical and Empirical Investigations Facing generic competition, the brand-name companies some-times launch generic versions themselves called authorized generics. This practice is puzzling. If it is cannibalization, it cannot be profitable. If it is divisionalization, it should be practiced always instead of sometimes. I explain this phenomenon in terms of switching costs in a model in which the incumbent first develops a customer base to ready itself against generic competition later. I show that only sufficiently low switching costs or large market size justifies launch of AGs. I then use prescription drug data to test those results and find support. Chapter 3: The Merger Paradox and R&D Oligopoly theory says that merger is unprofitable, unless a majority of firms in industry merge. Here, we introduce R&D opportunities to resolve this so-called merger paradox. We have three results. First, when there is one R&D firm, that firm can profitably merge with any number of non-R&D firms. Second, with multiple R&D firms and multiple non-R&D firms, all R&D firms can profitably merge. Third, with two R&D firms and two non-R&D firms, each R&D firms prefer to merge with a non-R&D firm. With three or more than non-R&D firms, however, the R&D firms prefer to merge with each other.

Essays in Environmental Economic Valuation and Decision Making in the Presence of an Environmental Disaster

The first essay developed a respondent model of Bayesian updating for a double-bound dichotomous choice (DB-DC) contingent valuation methodology. I demonstrated by way of data simulations that current DB-DC identifications of true willingness-to-pay (WTP) may often fail given this respondent Bayesian updating context. Further simulations demonstrated that a simple extension of current DB-DC identifications derived explicitly from the Bayesian updating behavioral model can correct for much of the WTP bias. Additional results provided caution to viewing respondents as acting strategically toward the second bid. Finally, an empirical application confirmed the simulation outcomes. The second essay applied a hedonic property value model to a unique water quality (WQ) dataset for a year-round, urban, and coastal housing market in South Florida, and found evidence that various WQ measures affect waterfront housing prices in this setting. However, the results indicated that this relationship is not consistent across any of the six particular WQ variables used, and is furthermore dependent upon the specific descriptive statistic employed to represent the WQ measure in the empirical analysis. These results continue to underscore the need to better understand both the WQ measure and its statistical form homebuyers use in making their purchase decision. The third essay addressed a limitation to existing hurricane evacuation modeling aspects by developing a dynamic model of hurricane evacuation behavior. A household’s evacuation decision was framed as an optimal stopping problem where every potential evacuation time period prior to the actual hurricane landfall, the household’s optimal choice is to either evacuate, or to wait one more time period for a revised hurricane forecast. A hypothetical two-period model of evacuation and a realistic multi-period model of evacuation that incorporates actual forecast and evacuation cost data for my designated Gulf of Mexico region were developed for the dynamic analysis. Results from the multi-period model were calibrated with existing evacuation timing data from a number of hurricanes. Given the calibrated dynamic framework, a number of policy questions that plausibly affect the timing of household evacuations were analyzed, and a deeper understanding of existing empirical outcomes in regard to the timing of the evacuation decision was achieved.

Essays on competition in the pharmaceutical industry

Chapter 1: Patents and Entry Competition in the Pharmaceutical Industry: The Role of Marketing Exclusivity. Effective patent length for innovation drugs is severely curtailed because of extensive efficacy and safety tests required for FDA approval, raising concern over adequacy of incentives for new drug development. The Hatch-Waxman Act extends patent length for new drugs by five years, but also promotes generic entry by simplifying approval procedures and granting 180-day marketing exclusivity to a first generic entrant before the patent expires. In this paper we present a dynamic model to examine the effect of marketing exclusivity. We find that marketing exclusivity may be redundant and its removal may increase generic firms' profits and social welfare. ^ Chapter 2: Why Authorized Generics?: Theoretical and Empirical Investigations Facing generic competition, the brand-name companies some-times launch generic versions themselves called authorized generics. This practice is puzzling. If it is cannibalization, it cannot be profitable. If it is divisionalization, it should be practiced always instead of sometimes. I explain this phenomenon in terms of switching costs in a model in which the incumbent first develops a customer base to ready itself against generic competition later. I show that only sufficiently low switching costs or large market size justifies launch of AGs. I then use prescription drug data to test those results and find support. ^ Chapter 3: The Merger Paradox and R&D Oligopoly theory says that merger is unprofitable, unless a majority of firms in industry merge. Here, we introduce R&D opportunities to resolve this so-called merger paradox. We have three results. First, when there is one R&D firm, that firm can profitably merge with any number of non-R&D firms. Second, with multiple R&D firms and multiple non-R&D firms, all R&D firms can profitably merge. Third, with two R&D firms and two non-R&D firms, each R&D firms prefer to merge with a non-R&D firm. With three or more than non-R&D firms, however, the R&D firms prefer to merge with each other.^

Tubular and Sector Heat Pipes with Interconnected Branches for Gas Turbine and/or Compressor Cooling

Designing turbines for either aerospace or power production is a daunting task for any heat transfer scientist or engineer. Turbine designers are continuously pursuing better ways to convert the stored chemical energy in the fuel into useful work with maximum efficiency. Based on thermodynamic principles, one way to improve thermal efficiency is to increase the turbine inlet pressure and temperature. Generally, the inlet temperature may exceed the capabilities of standard materials for safe and long-life operation of the turbine. Next generation propulsion systems, whether for new supersonic transport or for improving existing aviation transport, will require more aggressive cooling system for many hot-gas-path components of the turbine. Heat pipe technology offers a possible cooling technique for the structures exposed to the high heat fluxes. Hence, the objective of this dissertation is to develop new radially rotating heat pipe systems that integrate multiple rotating miniature heat pipes with a common reservoir for a more effective and practical solution to turbine or compressor cooling. In this dissertation, two radially rotating miniature heat pipes and two sector heat pipes are analyzed and studied by utilizing suitable fluid flow and heat transfer modeling along with experimental tests. Analytical solutions for the film thickness and the lengthwise vapor temperature distribution for a single heat pipe are derived. Experimental tests on single radially rotating miniature heat pipes and sector heat pipes are undertaken with different important parameters and the manner in which these parameters affect heat pipe operation. Analytical and experimental studies have proven that the radially rotating miniature heat pipes have an incredibly high effective thermal conductance and an enormous heat transfer capability. Concurrently, the heat pipe has an uncomplicated structure and relatively low manufacturing costs. The heat pipe can also resist strong vibrations and is well suited for a high temperature environment. Hence, the heat pipes with a common reservoir make incorporation of heat pipes into turbo-machinery much more feasible and cost effective.

Investigation of the causes of serious injury and fatal crashes: An analysis using econometric models

The rate of fatal crashes in Florida has remained significantly higher than the national average for the last several years. The 2003 statistics from the National Highway Traffic Safety Administration (NHTSA), the latest available, show a fatality rate in Florida of 1.71 per 100 million vehicle-miles traveled compared to the national average of 1.48 per 100 million vehicle-miles traveled. The objective of this research is to better understand the driver, environmental, and roadway factors that affect the probability of injury severity in Florida. ^ In this research, the ordered logit model was used to develop six injury severity models; single-vehicle and two-vehicle crashes on urban freeways and urban principal arterials and two-vehicle crashes at urban signalized and unsignalized intersections. The data used in this research included all crashes that occurred on the state highway system for the period from 2001 to 2003 in the Southeast Florida region, which includes the Miami-Dade, Broward and Palm Beach Counties.^ The results of the analysis indicate that the age group and gender of the driver at fault were significant factors of injury severity risk across all models. The greatest risk of severe injury was observed for the age groups 55 to 65 and 66 and older. A positive association between injury severity and the race of the driver at fault was also found. Driver at fault of Hispanic origin was associated with a higher risk of severe injury for both freeway models and for the two-vehicle crash model on arterial roads. A higher risk of more severe injury crash involvement was also found when an African-American was the at fault driver on two-vehicle crashes on freeways. In addition, the arterial class was also found to be positively associated with a higher risk of severe crashes. Six-lane divided arterials exhibited the highest injury severity risk of all arterial classes. The lowest severe injury risk was found for one way roads. Alcohol involvement by the driver at fault was also found to be a significant risk of severe injury for the single-vehicle crash model on freeways. ^

Hydrological dynamics between a coastal aquifer and the adjacent estuarine system, Biscayne Bay, South Florida

Geochemical and geophysical approaches have been used to investigate the freshwater and saltwater dynamics in the coastal Biscayne Aquifer and Biscayne Bay. Stable isotopes of oxygen and hydrogen, and concentrations of Sr2+ and Ca2+ were combined in two geochemical mixing models to provide estimates of the various freshwater inputs (precipitation, canal water, and groundwater) to Biscayne Bay and the coastal canal system in South Florida. Shallow geophysical electromagnetic and direct current resistivity surveys were used to image the geometry and stratification of the saltwater mixing zone in the near coastal (less than 1km inland) Biscayne Aquifer. The combined stable isotope and trace metal models suggest a ratio of canal input-precipitation-groundwater of 38%–52%–10% in the wet season and 37%–58%–5% in the dry season with an error of 25%, where most (20%) of the error was attributed to the isotope regression model, while the remaining 5% error was attributed to the Sr2+/Ca2+ mixing model. These models suggest rainfall is the dominate source of freshwater to Biscayne Bay. For a bay-wide water budget that includes saltwater and freshwater mixing, fresh groundwater accounts for less than 2% of the total input. A similar Sr 2+/Ca2+ tracer model indicates precipitation is the dominate source in 9 out of 10 canals that discharge into Biscayne Bay. The two-component mixing model converged for 100% of the freshwater canal samples in this study with 63% of the water contributed to the canals coming from precipitation and 37% from groundwater inputs ±4%. There was a seasonal shift from 63% precipitation input in the dry season to 55% precipitation input in the wet season. The three end-member mixing model converged for only 60% of the saline canal samples possibly due to non-conservative behavior of Sr2+ and Ca2+ in saline groundwater discharging into the canal system. Electromagnetic and Direct Current resistivity surveys were successful at locating and estimating the geometry and depth of the freshwater/saltwater interface in the Biscayne Aquifer at two near coastal sites. A saltwater interface that deepened as the survey moved inland was detected with a maximum interpreted depth to the interface of 15 meters, approximately 0.33 km inland from the shoreline. ^

A preliminary analysis of the correlation of food-web characteristics with hydrology and nutrient gradients in the southern Everglades

We estimated trophic position and carbon source for three consumers (Florida gar, Lepisosteus platyrhincus; eastern mosquitofish, Gambusia holbrooki; and riverine grass shrimp, Palaemonetes paludosus) from 20 sites representing gradients of productivity and hydrological disturbance in the southern Florida Everglades, U.S.A. We characterized gross primary productivity at each site using light/dark bottle incubation and stem density of emergent vascular plants. We also documented nutrient availability as total phosphorus (TP) in floc and periphyton, and the density of small fishes. Hydrological disturbance was characterized as the time since a site was last dried and the average number of days per year the sites were inundated for the previous 10 years. Food-web attributes were estimated in both the wet and dry seasons by analysis of δ15N (trophic position) and δ13C (food-web carbon source) from 702 samples of aquatic consumers. An index of carbon source was derived from a two-member mixing model with Seminole ramshorn snails (Planorbella duryi) as a basal grazing consumer and scuds (amphipods Hyallela azteca) as a basal detritivore. Snails yielded carbon isotopic values similar to green algae and diatoms, while carbon values of scuds were similar to bulk periphyton and floc; carbon isotopic values of cyanobacteria were enriched in C13compared to all consumers examined. A carbon source similar to scuds dominated at all but one study site, and though the relative contribution of scud-like and snail-like carbon sources was variable, there was no evidence that these contributions were a function of abiotic factors or season. Gar consistently displayed the highest estimated trophic position of the consumers studied, with mosquitofish feeding at a slightly lower level, and grass shrimp feeding at the lowest level. Trophic position was not correlated with any nutrient or productivity parameter, but did increase for grass shrimp and mosquitofish as the time following droughts increased. Trophic position of Florida gar was positively correlated with emergent plant stem density.

Essays on intergenerational and regional aspects of water management

This dissertation consists of three essays on different aspects of water management. The first essay focuses on the sustainability of freshwater use by introducing the notion that altruistic parents do bequeath economic assets for their offspring. Constructing a two-period, over-lapping generational model, an optimal ratio of consumption and pollution for old and young generations in each period is determined. Optimal levels of water consumption and pollution change according to different parameters, such as, altruistic degree, natural recharge rate, and population growth. The second essay concerns water sharing between countries in the case of trans-boundary river basins. The paper recognizes that side payments fail to forge water-sharing agreement among the international community and that downstream countries have weak bargaining power. An interconnected game approach is developed by linking the water allocation issue with other non-water issues such as trade or border security problems, creating symmetry between countries in bargaining power. An interconnected game forces two countries to at least partially cooperate under some circumstances. The third essay introduces the concept of virtual water (VW) into a traditional international trade model in order to estimate water savings for a water scarce country. A two country, two products and two factors trade model is developed, which includes not only consumers and producer's surplus, but also environmental externality of water use. The model shows that VW trade saves water and increases global and local welfare. This study should help policy makers to design appropriate subsidy or tax policy to promote water savings especially in water scarce countries.^

Consulting Services to Determine the Effectiveness of Vegetation Classification Using WorldView 2 Satellite Data for the Greater Everglades

The purpose of this project was to evaluate the use of remote sensing 1) to detect and map Everglades wetland plant communities at different scales; and 2) to compare map products delineated and resampled at various scales with the intent to quantify and describe the quantitative and qualitative differences between such products. We evaluated data provided by Digital Globe’s WorldView 2 (WV2) sensor with a spatial resolution of 2m and data from Landsat’s Thematic and Enhanced Thematic Mapper (TM and ETM+) sensors with a spatial resolution of 30m. We were also interested in the comparability and scalability of products derived from these data sources. The adequacy of each data set to map wetland plant communities was evaluated utilizing two metrics: 1) model-based accuracy estimates of the classification procedures; and 2) design-based post-classification accuracy estimates of derived maps.

Essays on Intergenerational and Regional Aspects of Water Management

This dissertation consists of three essays on different aspects of water management. The first essay focuses on the sustainability of freshwater use by introducing the notion that altruistic parents do bequeath economic assets for their offspring. Constructing a two-period, over-lapping generational model, an optimal ratio of consumption and pollution for old and young generations in each period is determined. Optimal levels of water consumption and pollution change according to different parameters, such as, altruistic degree, natural recharge rate, and population growth. The second essay concerns water sharing between countries in the case of trans-boundary river basins. The paper recognizes that side payments fail to forge water-sharing agreement among the international community and that downstream countries have weak bargaining power. An interconnected game approach is developed by linking the water allocation issue with other non-water issues such as trade or border security problems, creating symmetry between countries in bargaining power. An interconnected game forces two countries to at least partially cooperate under some circumstances. The third essay introduces the concept of virtual water (VW) into a traditional international trade model in order to estimate water savings for a water scarce country. A two country, two products and two factors trade model is developed, which includes not only consumers and producer’s surplus, but also environmental externality of water use. The model shows that VW trade saves water and increases global and local welfare. This study should help policy makers to design appropriate subsidy or tax policy to promote water savings especially in water scarce countries.