Three Essays in Applied Economics

Abstract

The dissertation begins with a brief discussion of the benefits of using an essay style approach compared to a traditional opus in chapter one. Chapter two examines the consumers facing the implications of energy regulation policies, United States residents, who have increasing control over their energy consumption in response to price changes. This chapter paper estimates the price elasticity of demand for biomass, distillate fuel oil, hydrocarbon gas liquid, and natural gas using the Exact Affine Stone Index (EASI) demand system, while contributing methodologically the Differential Exact Affine Stone Index (DEASI) demand system. Chapter three extends the asset pricing literature by offering a proprietary index of negative investor sentiment linked to carbon monoxide (CO), nitrogen dioxide (NO2), ozone particle (O3), 2.5 mm particulate matter (PM2.5), and sulfur dioxide (SO2) levels. Food products and wholesale portfolio returns increase with negative investor sentiment, consistent with psychological traits linked to binge eating and shopping sprees when individuals experience stress. Personal services portfolio returns decrease when negative investor sentiment increases, consistent with the behavior isolationism Chapter four addresses the issue with OLS estimation in hedonic pricing model literature of not accounting for sample selection bias. In broodmare auctions, the purchased decision and whether a price is realized or zero is endogenous. This chapter contributes to the hedonic broodmare price analysis literature by implementing the Heckman (1976) procedure to control for selection in estimating a hedonic pricing model using data comes from the 2020 January Keenland Sale. A list of published papers does not accommodate this selection process and has biased coefficients. The sire’s stud fee, domestic status, and the day of the session are significant for broodmare prices. This may be implemented within a profit maximizing purchasing and breeding strategy.