Scognamiglio, Annalisa (2016) Essays in Applied Microeconomics. [Tesi di dottorato]

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This thesis consists of three empirical contributions to the applied microeconomics literature. The first chapter studies the impact of property taxes on property values. The unexpected introduction of a new fiscal regime on property taxes adopted by the Italian government in December 2011 within the austerity plan to face the sovereign debt crisis provides an ideal empirical setting to study whether changes in property taxes are capitalized into house prices. We exploit variation in tax rates across municipalities as the intensity of the treatment and address the endogeneity problem by exploiting differences in proximity to the municipal elections. Municipalities that did not have elections in 2013 set a tax rate about 0.1 percentage points higher and recorded a reduction in average property values about 6% higher than the others. The effect is attributable to the relative higher property tax rate and provides evidence in favor of the capitalization hypothesis. The second chapter studies the impact of monetary policy on households' consumption via the income effect arising from changes in mortgage payments. Using the 2008-2014 Italian Survey of Household Income and Wealth, the analysis shows that the drop in interest rates following the Great Recession was associated with a reduction in mortgage payments of households with Adjustable Rate Mortgages (ARM), but had no effect on households with Fixed Rate Mortgages (FRM). After the shock, consumption of ARM holders increases relative to FRM, but the implied Marginal Propensity to Consume is not statistically different from zero. The chapter suggests two explanations for the weak consumption response to the income shock. First, the shock is partly offset by a reduction in income from financial assets owned by mortgagors. Second, over one third of mortgagors believed that the income shock was transitory, thereby implying a small effect on consumption. The last chapter shows that there is substantial geographical variation in the use of cesarean sections in Italy. Such variation is not driven by medical need and higher cesarean rates are achieved by performing the procedure on less and less appropriate patients. I find evidence that high-use areas develop higher ability in performing cesareans. Finally, by using both panel data analysis and instrumental variables, I show that there is no significant relation between risk-adjusted cesarean rates and maternal and neonatal mortality. The combined evidence in this chapter suggests that lowering cesarean rates would likely affect less appropriate patients and would not affect neonatal nor maternal mortality.

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