Essays in applied microeconomics

Abstract

The four papers in this thesis contribute to four distinct strands of the applied economics literature. Chapter 1 considers whether the level of political competition in a postcode affects the incomes of the people who live there. Unlike previous research, I am able to exploit exogenous variation in electoral boundaries, and as such, exogenous variation in the level of political competition. I do not find a systematic relationship between a change in the political importance of an area - as measured by marginality - and the incomes of the people who live there. Chapter 2 explores whether rents from natural resources affect the sub-components of Political Rights or Civil Liberties, as measured by Freedom House. We find that higher resource rents cause a deterioration in Freedom House's measure of Political Pluralism and Participation, but other sub-components are unaffected. We demonstrate why our results extend upon and differ from those in the existing literature. Chapter 3 uses a random gambling prime to assess the malleability of stated risk and time preferences. The gambling prime causes respondents to self-assess as being more risk-averse, and less patient. These results are remarkably homogeneous across a range of demographic groups. There is also some evidence that, for the small number of respondents whose gambling behaviour may have been problematic in the past, the effect of the prime on risk preferences diminishes as their past gambling behaviour becomes riskier. This could indicate that primes of this nature have limited policy application. Chapter 4 describes, for the first time, the Multi-Agency Data Integration Project dataset. This dataset links medicare service use data to personal income tax and social security data, as well as data from the 2011 census. Of particular interest is the finding that a substantial number of people have stated on the census an income above the tax-free threshold, but do not appear in the personal income tax data. A related finding is that, contrary to our speculation, those with the lowest incomes according to the personal income tax data are the most likely to decline to state an income in the 2011 census. Show more