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Three essays on the impact of institutions and policies on socio-economic outcomes

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  • Tekleselassie, Tsegay Gebrekidan

Abstract

This thesis consists of three self-contained essays. It examines the impact of institutions and cross-border policies on socio-economic outcomes. The first essay focuses on the impact of religiosity, general and political trust, local participation, and welfare metrics on well-being in rural areas using the Ethiopian Rural Household Survey. Ordered probit methods reveal distinctive determinants of overall life satisfaction and momentary happiness. Broader socio-economic factors such as religiosity and political governance strongly predict life satisfaction, while largely welfare metrics drive momentary happiness. The second essay studies the determinants of cross-border flows of people for tourism, personal, or business purposes with a particular emphasis on the role of visa policies using instrumental variable estimation for outbound travel to a cross-section of countries for 2005 and 2010. We adopt the UN General Assembly Affinity Index, a measure of the quality of bilateral relations between nations, to instrument for bilateral visa policy. The affinity index explains 22% of the variation in visa policies in both 2005 and 2010. We find that, ceteris paribus, imposing visa reduces travel by about 80% and 73% in 2005 and 2010 respectively implying restrictive visa policies discourage cross-border travel significantly. We also find an adverse impact of restrictive visa policies on travel and tourism-related revenues and employment. The third essay addresses the role of the United States Visa Waiver Program (VWP) on inbound travel. We employ Difference-in-Difference (Diff-in-Diff) estimation on panel data in respect of US inbound travel from eight countries newly admitted to the program in 2008, versus several comparison (control) groups including ten aspirant - so-called `roadmap' - countries in the process of negotiation at the same time. We also restrict the treatment and comparison groups to Europe to reduce potential bias arising from heterogeneity and unobserved country characteristics. Treating the policy as a quasi-natural experiment allows a neater identification of the impact of visa policies on travel. We conclude, ceteris paribus, admitting a country to the program increases inbound travel from that country to the US by 29% to 44%.

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  • Tekleselassie, Tsegay Gebrekidan, 2016. "Three essays on the impact of institutions and policies on socio-economic outcomes," Economics PhD Theses 1316, Department of Economics, University of Sussex.
  • Handle: RePEc:sus:susphd:1316
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