Kai Wu

Crowding is a common disamenity, yet little is known about its monetary cost. We estimate the willingness to pay (WTP) to avoid crowding in public transit with a revealed-preference approach. Beijing Subway passengers choose departure times, trading off fare, in-train crowding, and schedule deviation, with price variation from an early-bird discount. Leveraging the subway's network structure, we impute real-time in-train crowding, infer each passenger's optimal arrival time, and construct a novel instrumental variable for crowding. The marginal WTP to reduce crowding by one passenger per square meter is about 0.05 RMB per minute, implying a crowding externality comparable to the fare. High-income passengers have higher crowding WTP but are less price-sensitive. An optimal crowding tax improves welfare within the subway system but is regressive; a two-class configuration elicits self-selection and benefits both high- and low-income commuters.

I investigate the impact of political consolidation on the corporate tax burden, leveraging the variation from a nationwide reform in China that shifted governance autonomy from annexed to annexing political units. Using administrative firm-level tax payment data from 2008 to 2015 and a heterogeneous difference-in-differences approach, I find divergent shifts in the effective corporate income tax rate among affected areas following the annexation. On average, annexing areas experienced a 1.8% decrease in the effective tax rate, contrasted with a 1.4% increase in annexed areas. These changes worked to make corporate tax rates more uniform across annexed and annexing areas. The observed effects are largely attributed to the adjustment in less transparent tax break programs, over which local governments possess greater discretion. Heterogeneity analysis suggests political favoritism and tax competition are additional mechanisms contributing to these findings.

This project studies how the costs of environmental regulation propagate along supply chains beyond the targeted firms. Exploiting the 2017 Xiong'an pollution shutdown campaign in China together with administrative firm-to-firm transaction data, it examines how the shock transmits to upstream suppliers and downstream customers, and whether losing a trading partner leads firms to contract trade with their remaining partners on both the input and the output side. A general equilibrium production-network model with scale economies links these firm-level responses to the design of environmental policy, comparing emissions taxes with quantity-based regulation.