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Economics

Permanent URI for this collectionhttps://uwspace.uwaterloo.ca/handle/10012/9874

This is the collection for the University of Waterloo's Department of Economics.

Research outputs are organized by type (eg. Master Thesis, Article, Conference Paper).

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Browsing Economics by Author "Gonzalez, Francisco"

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    Commuting, Spatial Allocations, and Inequalities
    (University of Waterloo, 2024-11-14) Yu, Aidi; Gonzalez, Francisco; Stacey, Derek
    This thesis examines the complex relationships between commuting times, wage disparities, gender differences, and urban spatial distribution, through the lens of three interconnected studies. The first chapter investigates the relationship between commuting times, wages, and the gender wage gap, with a focus on controlling for occupational choice endogeneity. Using data from the American Community Survey (ACS) and the Occupational Information Network (O*Net), the study highlights how gender differences significantly influence the positive correlation between commuting time and wages, especially among full-time working homeowners in U.S. cities. Through quantile regression analysis, it reveals that while men's returns on commuting diminish as income rises, the commuting gender gap remains relatively constant across the wage distribution. The second chapter delves deeper into the gendered impacts of commuting on wage disparities, addressing the endogeneity of commuting times. By constructing instrumental variables based on exogenous city characteristics from the 2016 ACS, the study isolates the causal effects of commuting on wages. The findings suggest that marital status drives the gender difference in commuting premiums, with married women and single men demanding higher wages to compensate for longer commutes. This chapter contributes to a broader understanding of wage-commute trade-offs and the socio-economic consequences of commuting time. The third chapter explores the interplay between job flexibility, residential location sorting, and wage determination through a monocentric city model. The model incorporates both high- and low-skilled workers and employs a bid-rent framework to determine housing prices and the spatial distribution of labour. The study finds that high-skilled workers' job flexibility significantly impacts their commuting decisions and urban spatial sorting patterns. In low-flexibility settings, high-skilled workers tend to live near the central business district, earning higher wages to offset the high cost of central real estate and commuting. Conversely, increased job flexibility enables these workers to relocate to more distant, affordable areas, thereby reducing the equilibrium skill premium. Together, these chapters provide a comprehensive analysis of how commuting, gender, and job flexibility interact to shape wage patterns and urban spatial structures in contemporary cities.
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    Conspicuous Consumption and Inequality
    (University of Waterloo, 2023-11-27) Nesterova, Iuliia; Gonzalez, Francisco
    My research is centered around understanding consumption behavior and its relationship with inequality. In Chapter 1, I study how consumption inequality in the United States has evolved over time, with a particular focus on distinguishing two major expenditure components: services and goods. I argue that such distinction is important to understand inequality between high and low income groups. I show that increases in consumption inequality over the period 1984-2018 were driven mostly by rising inequality in expenditure on services rather than goods. I further show that most of it was driven by increased inequality in young households expenditure in services, whereas older households have experienced no change in inequality of either good or service expenditures. As modern societies undergo the transformation into service societies, this research contributes to our understanding of the diverse effects of inequality and informs policy decisions to ensure that this transformation benefits all. Chapter 2 proposes a canonical model of intertemporal choice in which both current and future conspicuous consumption can distort household consumption behavior. What makes our model tractable is that we assume that each consumer cares about the expected comparison of relative consumption, which provides a parsimonious characterization of positional concerns. We show that equilibrium consumption behavior is a function of the distribution of conspicuous consumption in an individual’s reference group as well as her own permanent income. In turn, the distribution of conspicuous consumption is a function of the distribution of permanent income. The relevant empirical implication is that an individual’s consumption, by itself, is no longer a valid proxy for the individual’s permanent income if relative consumption matters. In Chapter 3, we document a robust effect of visible inequality on household expenditures in the United States over the period 2010–2018. To that end, we exploit variation in the cross-sectional distribution of visible consumption — expenditures in clothing, personal care, food away from home and vehicles — for younger and older households across regions of the United States and over time. We find that rising inequality in expenditure on visible goods within the different groups is associated with an increase in average spending on those same goods as well as an increase in total expenditures by the average household in the group. Our main findings are not likely to be a symptom of correlated differences in preferences across generations, selection effects across geographical locations, alternative sources of state-level variation over time, or measurement error. Rather, they most likely reflect actual distortions associated with consumption externalities. We conjecture that historically low interest rates and the rise of social media underlie our findings.