UCLA

Economic policies can have distributional effects on the market, and often the heterogeneity is tied to the differentiated socio-economic status of consumers. In this dissertation, I study two kinds of policies: rebate programs for clean vehicle buyers, and banking deregulation to stimulate credit supply. The results show that a rationed, income-capped program had large, unexpected spillover effects; while a national policy affected only the lower-valued segment of the housing market.

In Chapter 1, we examine the informational spillover effects on clean vehicles sales associated with a highly-rationed rebate program that targeted moderate to lower lower-income Californians. By exploiting differences of the geographic roll-out in this program, we find that it was associated with approximately at least 2,645 additional clean vehicles sales beyond the 712 vehicles that directly received subsidies. We also calculate the direct environmental benefits of both those vehicles receiving direct subsidies and "spillover" vehicles by estimating local reductions in gasoline consumption and increases in electricity generation attributable to the program, and their marginal effect on human health. Although the per vehicle benefits were lower for the induced "spillover" vehicles then for the subsidized vehicles, the aggregate benefits provided by the spillover vehicles was one third larger than those that were directly subsidized.

Using a structural model, I further explore how subsidies affect electric vehicle sales and prices, and the welfare consequences of such schemes in Chapter 2. I begin with providing empirical evidence that government incentive programs have helped increase electric vehicle sales. Next, I build and estimate a static market equilibrium model, taking into consideration subsidies, observed and unobserved properties of vehicles, heterogeneous consumer preferences, and marginal cost of production. Finally, I simulate the effects of government incentive programs on electric vehicle sales and prices, and estimate their welfare consequences.

The final chapter is dedicated to the effect of credit market on housing prices. Does a financial market expansion provide the same benefits to households of all income levels? In this paper, we answer the question by studying the 1994 Riegle-Neal Act, a national banking deregulation rule. Our results suggest that the deregulation leads to higher levels of credit supply from banks. And in turn, 1% increase in credit supply leads to 0.51-0.52% increase in the capital gains of lower-valued properties. Median and higher-valued properties are not affected significantly by the credit shock. A possible explanation is that the channels of credit expansion, including lowered down payment, are mostly relevant to low-income home buyers, who are also the major players in the lower-valued property market.