Three Essays on CGE Modeling, Education Economics and Energy Economics

Abstract

This dissertation consists of three essays in economics on CGE modeling, education economics and energy economics. The first essay focuses on quantifying the economic contribution of the automotive industry to Alabama’s economy using a static computable general equilibrium (CGE) model. The findings indicate that the automotive industry’s contribution to Alabama’s economy has been overestimated. The findings also show that the impacts of the industry are almost evenly distributed across Alabama. A five percent hypothetical year-to-year increase in automotive demand raises the GSP, government revenues and household income by roughly 0.05 percent, 0.01 percent, and less than 0.2 percent respectively, which reveals that Alabama is far from being over-dependent on the automotive industry and highlights the diversification of the Alabama economy. In chapter 2 the propensity score matching methods was used to evaluate the causal association between early teen drinking onset and high school dropout status by region and by gender. Based on the National Longitudinal Surveys of Youth 1997 (NLSY97) data set, the results demonstrate that this causal effect is strong for rural male adolescents. Early drinking onset significantly positively raises their dropout rate by 5 percent. However, the causal effect among other groups is insignificant. Sensitivity analysis shows that the findings are not robust to the unobserved factors. Chapter 3 explores the causal relationships between CO2 emissions, electricity consumption, and economic growth for a group of 15 Sub-Sahara African (SSA) countries from 1980 to 2007 using panel cointegration and panel vector error correction modeling methods. The findings demonstrate that in the long run electricity consumption has a statistically significant and positive impact on CO2 emissions. However, the inverted U-shape Environmental Kuznets Curve (EKC) hypothesis does not hold in the SSA countries’ case. The panel causality tests indicate that there is short-run uni-directional causality, which runs from CO2 emissions to economic growth and runs from economic growth to electricity consumption. At the same time, there are bidirectional causality between electricity consumption and CO2 emissions and uni-directional causalities running from economic growth to electricity consumption and CO2 emissions respectively in the long run.