Quantitative evaluations of urban and environmental policies in spatial equilibrium

This thesis consists of two studies that examine urban transportation policies and international trade and environmental policies using quantitative spatial models. The first study, comprising Chapters 2 and 3, investigates the welfare implications of urban highway infrastructure. Chapter 2 uses granular smartphone GPS data from the Seattle metropolitan area to analyze consumer travel behavior. I find that urban highways act as barriers to consumption travel: conditional on travel time, destinations reached by crossing highways are 24.9% less likely to be chosen, and those reached by using highways are 23.5% less likely. These effects are equivalent to increasing travel time by 2.4 minutes. These impacts are stronger for short, consumption trips in dense urban areas, where local accessibility is critical for quality of life. Chapter 3 develops and calibrates a general equilibrium urban model that incorporates both work and consumption travel to evaluate alternative highway systems. Using parameters estimated in Chapter 2, I conduct counterfactual simulations and find that mitigating highway disamenities-by burying highways or replacing them with primary roads-yields welfare gains of at least 9%. These gains arise from improved access to urban amenities, reallocating population and economic activities toward central areas and away from suburbs. Decomposition of the counterfactual equilibrium highlights the substantial contribution to welfare from the model's new mechanisms: the local effect of highways on consumption travel and the agglomeration of consumption activities. These results highlight the trade-offs in transportation policy between regional connectivity and local amenity. The second study, in Chapter 4, examines the relationship between international trade, the environment, and environmental regulations. We develop a multi-sector general equilibrium trade model with pollution as a byproduct of production and allow for endogenous environmental policies. Our analysis suggests that environmental regulations provide a source of comparative advantage, but we find no evidence that reducing trade barriers causes pollution-intensive industries to concentrate in countries with weak environmental regulations. This is because, environmental regulation is relatively weak in determining patterns of international specialization. Instead, we find that productivity and trade costs are the dominant forces that limit the influence of environmental policy on production and trade.