Essays on Firm Heterogeneity with Empirical Applications in Economic History and Agricultural Economics

This thesis uses models of firm-heterogeneity to complete empirical analyses in economic history and agricultural economics. In Chapter 2, a theoretical model of firm heterogeneity is used to derive a statistic that summarizes the welfare gains from the introduction of a new technology. The empirical application considers the use of mechanical steam power in the Canadian manufacturing sector during the late nineteenth century. I exploit exogenous variation in geography to estimate several parameters of the model. My results indicate that the use of steam power resulted in a 15.1 percent increase in firm-level productivity and a 3.0-5.2 percent increase in aggregate welfare. Chapter 3 considers various policy alternatives to price ceiling legislation in the market for production quotas in the dairy farming sector in Quebec. I develop a dynamic model of the demand for quotas with farmers that are heterogeneous in their marginal cost of milk production. The econometric analysis uses farm-level data and estimates a parameter of the theoretical model that is required for the counterfactual experiments. The results indicate that the price of quotas could be reduced to the ceiling price through a 4.16 percent expansion of the aggregate supply of quotas, or through moderate trade liberalization of Canadian dairy products. In Chapter 4, I study the relationship between farm-level productivity and participation in the Commercial Export Milk (CEM) program. I use a difference-in-difference research design with inverse propensity weights to test for causality between participation in the CEM program and total factor productivity (TFP). I find a positive correlation between participation in the CEM program and TFP, however I find no statistically significant evidence that the CEM program affected TFP.

ROCK OUTCROPS IN THE CANADIAN SHIELD: AN INVESTIGATION OF CONTAMINANT TRANSPORT FROM SURFACE SOURCES IN FRACTURED ROCK AQUIFERS

Flow, recharge and transport dynamics in fractured rock aquifers with low lying rock outcrops is a largely unexplored area of study in hydrogeology. The purpose of this thesis is to examine these topics in an agricultural area in Eastern Ontario. The study consists of a regional scale groundwater quality study, an infiltration experiment that considers bacteria transport from the ground surface to a well, and a numerical modelling study that tests the parameters that affect surface infiltration of a tracer from a rock outcrop to a deeper horizontal fracture. In the water quality study, approximately 65% of the samples contained total coliform, 16% contained E. coli, and 1% contained nitrate-N at greater than 5 mg/L. Occurrence of E. coli increased when considering seasonality, where wells were drilled on rock outcrops, and for shallow well intervals. Nitrate-N did not occur above the Guidelines for Canadian Drinking Water Quality (Health Canada, 2012) of 10 mg/L. Rapid arrival times were observed in the infiltration study for both the microspheres (30 minutes) and a dye tracer (45 minutes) in a well approximately 6.0 m in horizontal and 2.8 m in vertical distance from the tracer source. Transport velocities were approximately 38.9 m/day for the dye tracer and 115.2 m/day for the colloidal tracer. Results of the model runs indicate that overburden can provide an effective protective layer to transport in fractures, that high groundwater velocities occur in larger fracture apertures and higher gradients dilute tracer concentrations, and that lower groundwater velocities occur with smaller fracture apertures and lower gradients result in elevated tracer concentrations. Lower rainfall rates, larger fracture apertures, early tracer time, larger gradients, and lower water levels maintained unsaturated conditions for longer time periods such that tracer transport was delayed until saturated conditions were attained. The overall heterogeneity of this aquifer environment creates a source water protection conundrum where the water quality is generally good, while transport can occur very quickly in proximity to rock outcrops and in areas with limited overburden.