Topics in Spatial-Temporal Economics
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This dissertation can be broadly defined as touching economic questions as they relate to both time and space. In the first chapter, I investigate reference point updating within periods. The defining feature separating (cumulative) prospect theory from expected utility theory is that potential outcomes are measured relative to a reference point as opposed to final asset allocation. Using transportation data, I am able to measure reference point adaption when drivers are faced with an unexpected delay en route. A novel, yet conservative, approach is proposed to estimate reference point adaption amid data uncertainty. Using this new estimation technique, it is found that drivers are more likely to change their reference point if the unexpected delay occurs near the endpoints of travel. In chapter two, I provide additional evidence that the skewness observed in travel-time distributions may not be an important factor in predicting the chosen route. Drivers prefer routes which are both short in duration and consistently reliable. Notwithstanding decades of research, there has yet to materialize a superior and widely accepted measure for reliability that captures the multifaceted nuances of route choice. As with the previous literature, the mean and variance of each route are found to be significant. However, the documented positive skew of travel-time distributions is not found to be significant in determining the preferred route. The last chapter sheds light on the relationship between housing price and voting patterns in U.S. presidential elections. While measures of economic growth and the unemployment rate have long been found to be essential economic indicators in predicting election results, they do not account for the largest asset a typical household owns: their home. I develop a model of aggregate household wealth using the Zillow Home Value Index as a measure of real estate wealth at the county-level across the 5 most recent presidential elections. As housing price increases (decreases), ceteris paribus, the electorate tend to vote for the Democratic (Republican) presidential candidate.