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Essays in applied microeconomics

Rossitti, Giuseppe (2020) Essays in applied microeconomics. PhD thesis, London School of Economics and Political Science.

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This thesis is composed of three essays. The first two look at the effect of location on ability sorting in political and judicial institutions, while the third essay focuses on the relationship between religion and innovation. In chapter 1 I exploit a novel and rich data-set with biographical information of US state legislators to investigate their sorting based on remoteness and attractiveness of the state capital. The main finding of the chapter is that in more remote US state capitals legislators are on average less educated and experienced. The results hold true for several measures of legislators' human capital and are robust to using different indicators of remoteness, based on the spatial distribution of the population, and controlling for other characteristics of the legislatures. The empirical strategy relies on the combination of a within-state analysis with an instrumental variables approach that relies on the proximity of capitals to the state centroids to identify the causal effect of capitals' remoteness across states. Finally, I also find that legislators' level of education and experience affects public good provision and corruption. Chapter 2 focuses on the spatial variation in the UK criminal courts' performance across the country. I use the differences in real salary generated by a country-wide fixed wage for the category of criminal courts judges as a source of exogenous variation. The main finding of the chapter is that there is a negative relationship between performance, measured as the number of non-overturned trial sentences, and the real salary. In particular, London courts perform better on average than those in the rest of the country. I interpret the results as evidence of the willingness of highly paid professionals, such as judges, to accept a negative wage premium to sort in locations with a higher level of amenities. This evidence aligns with that provided by chapter 1 in showing that the location of institutions - in this case courts - affects their composition and in turn outcomes. Chapter 3 studies the relationship between innovation, measured using patent filings per capita, and different indicators of religiousness, both cross-country and at US state-level. I use instrumental variables to attempt to pin down the effect of innovation on religiousness. In the cross-country analysis I use patent protection and property rights protection to instrument innovation, whilst in the US state-level analysis I build an instrument based on the clustering of academic institutions. I show the existence of a negative relationship robust to different specifications and using a different measure of innovation based on scientific articles per capita.

Item Type: Thesis (PhD)
Additional Information: © 2020 Giuseppe Rossitti
Library of Congress subject classification: H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
Sets: Departments > Economics
Supervisor: Sturm, Daniel

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