Author ORCID Identifier
https://orcid.org/0009-0005-0199-9332
Date Available
11-21-2025
Year of Publication
2025
Document Type
Doctoral Dissertation
Degree Name
Doctor of Philosophy (PhD)
College
Business and Economics
Department/School/Program
Economics
Faculty
Dr. Anthony Creane
Faculty
Dr. Steven Lugauer
Abstract
Economics 101 teaches that the interaction between supply and demand determines the prices and quantities consumers face. In econometric research, it is critical to remain aware of this canonical fact, as failure to do so can introduce bias in the estimation of economic parameters. This dissertation empirically demonstrates the importance of factoring in economic structure in three applied essays.
In the first essay, I estimate the impact of rating visibility on Airbnb pricing using a two-way fixed effects model. To do so, I primarily rely on an instrumental variables approach that I argue should identify a supply-side relationship. I provide evidence that alternative methods — including cutting-edge estimators such as the Callaway–Sant’Anna group-time average treatment effect estimator and the Bayesian Structural Time Series estimator — appear to be biased toward the null. In contrast, my instrumental variables estimation produces results consistent with a standard upward-sloping supply curve that shifts rightward (that is, supply increases) when a listing receives its first star rating on the Airbnb platform. This finding helps to explain mixed evidence in previous literature that fails to isolate either side of the market.
In the second essay, I estimate the demand for cigarette and e-cigarette products using the BLP Random Coefficients demand estimator. The structural approach enables me to estimate underlying utility parameters that allow me to generate esti- mates of the full set of cross-price elasticities across all brands and markets. My results indicate a standard downward-sloping demand curve for cigarette and e-cigarette products. This set of elasticities reveals limited substitution both between cigarette and e-cigarette products and within product categories themselves — a finding that calls into question a longstanding notion that traditional cigarette users can be easily incentivized to switch to e-cigarettes.
Finally, in the third essay, I use the demand estimates from the second essay to simulate hypothetical counterfactuals. Among these counterfactuals, I explore the impacts of e-cigarette taxes as well as the impacts of acquisitions of e-cigarette brands by traditional cigarette companies. For the taxation counterfactuals, I estimate that a flat e-cigarette tax of $1 would generate between $52 million and $131 million in government revenue per annum. In subsequent analysis, I find that if policymakers wished to maximize government revenue, a flat tax of $0.60 would push this range to $70 to $170 million per annum. For the acquisition counterfactuals, I find that such acquisitions would likely redistribute both market share and profits away from e-cigarette products toward cigarette products. That such acquisitions may decrease e-cigarette usage suggests policymakers might want to give more scrutiny to them in the future.
Digital Object Identifier (DOI)
https://doi.org/10.13023/etd.2025.534
Recommended Citation
Applin, Richard J., "Applied Essays in Industrial Organization: Pricing in Short-Term Rental Markets and Policy Implications in Tobacco Consumption" (2025). Theses and Dissertations--Economics. 71.
https://uknowledge.uky.edu/economics_etds/71
