Job Market Paper
Sacrifice for the Greater Good? Benefits and Costs of Flood Detention Basins (with Yifan Wang)
Asian Development Bank-International Economic Association Innovative Policy Award (Honorable Mention); Selected for JEEM Special Issue Workshop (Data, Information, and Environment)
Media Coverage: VoxDev; Presentations: Harvard Kennedy School Climate Economics Workshop, LSE EEE Camp, Peking University-CCER Summer Institute, Renmin University of China, EAERE Early Career Workshop; AERE Annual Meeting, UEA Summer School, UEA North America Meeting, EEA-ESEM, North America Econometric Society Summer Meeting, Canadian Resource and Environmental Economics Association (CREEA) Annual Meeting, AEA/ASSA Annual Meeting
Asian Development Bank-International Economic Association Innovative Policy Award (Honorable Mention); Selected for JEEM Special Issue Workshop (Data, Information, and Environment)
Media Coverage: VoxDev; Presentations: Harvard Kennedy School Climate Economics Workshop, LSE EEE Camp, Peking University-CCER Summer Institute, Renmin University of China, EAERE Early Career Workshop; AERE Annual Meeting, UEA Summer School, UEA North America Meeting, EEA-ESEM, North America Econometric Society Summer Meeting, Canadian Resource and Environmental Economics Association (CREEA) Annual Meeting, AEA/ASSA Annual Meeting
photo credit to: Fang Wu
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Abstract: Should we intentionally expose certain areas to higher risks to protect a broader region from disasters? Policymakers face a potential winner-loser dilemma in making such decisions. Since 2000, 96 pre-designated Flood Detention Basin (FDB) counties in China have been frequently inundated to protect urban areas. Our study examines the benefits and costs of this flood risk redistribution policy. Event-study analysis reveals that counties under the FDB policy experience an annual real GDP loss of approximately US$10 billion. This economic underdevelopment is attributed to adverse impacts on firm entry and investment decisions. Upon inclusion in the FDB list, counties experience a significant average decrease in firm entry. Spatial regression discontinuity analysis further indicates a reduction in firm-level fixed asset investments in these counties. Using a spatial general equilibrium framework, we construct a counterfactual scenario without FDB counties absorbing excessive floodwater. Integrating a hydrodynamic engineering model, we find that the actual benefit-to-cost ratio in total output is greater than 1. However, our findings suggest overprotection of urban areas, as similar output gains could be achieved by removing higher productivity counties from the FDB list.
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Research Projects
2. Trapped in Flood? Migration Decisions in Response to Floods in China
(with Runhong Ma)
(with Runhong Ma)
- We study whether Chinese people in areas of higher flood risk are making optimal migration decisions.
3. Natural Disasters and Spatial Patterns of Innovation
(with Haoyu Gao, Runhong Ma, and Peixuan Zhao)
(with Haoyu Gao, Runhong Ma, and Peixuan Zhao)
- We study the impact of disasters on the vitality of innovation, and how disasters reshape the spatial distribution of patents.
4. Struggle in the Battle against Emissions: Green Transition in Steel Industry
(with Yuanhang Yu)
(with Yuanhang Yu)
- We try to understand why it is difficult for steel industry in developing countries to achieve its green target.
5. In the Shadow of Rainbow: Is Sexual Orientation Wage Gap Disappearing in the US?
Presentations: APPAM Annual Conference, AEA/ASSA Annual Meeting
Presentations: APPAM Annual Conference, AEA/ASSA Annual Meeting
- We show that gay male employees should have earned more than their heterosexual counterparts, but they did not.
6. Foreign Aid and Fiscal Capacity in Post-Cold War Africa
- We find that aid volatility in Africa exacerbates African countries' reliance on trade tax.