Urban Sprawl and Social Capital: Evidence from Indonesian Cities 

(with Andrea Civelli, Arya Gaduh and Alex Rothenberg)

The Economic Journal 133 (654): 2110-2146, August 2023  [Paper] 

We use detailed data from Indonesian cities to study how variation in density within urban areas affects social capital. For identification, we instrument density with soil characteristics, and control for community averages of observed characteristics. Under plausible assumptions, these controls address sorting on observables and unobservables. We find that lower density increases trust in neighbors and community participation. We also find that lower density is associated with lower interethnic tolerance, but this relationship is explained by sorting. Heterogeneity analysis suggests that crime in dense areas undermines community trust and participation, intensifying the negative impact of density.

Working Papers

When Regional Policies Fail: An Evaluation of Indonesia's Integrated Economic Development Zones 

(with A. V. Chari and Alex Rothenberg)  [Paper]

Revise & Resubmit, Journal of Development Economics

Many countries have used place-based policies to stimulate growth in lagging regions. We study Indonesia's Integrated Economic Development Zone (KAPET) program, which provided significant tax-breaks for firms locating in poorer districts in the Outer Islands. Along many dimensions, KAPET districts experienced no better development outcomes than their non-treated counterparts. The tax cuts neither encouraged greater firm entry, increased migration, nor raised local output. To investigate whether regional policies could have been redesigned to increase welfare and stimulate growth, we use a quantitative spatial model with multiple asymmetric regions, informal and formal sectors, costly trade, and costly migration.

Linguistic Distance,  Internal Migration and Welfare: Evidence from Indonesia  [Paper]

This paper quantifies the effects of cultural barriers on internal migration and welfare by exploiting rich ethnolinguistic data in Indonesia and a spatial equilibrium framework. I estimate internal migration gravity using linguistic distances as a proxy for cultural barriers and instrument for current linguistic differences using data from the 1930 colonial census. I find inverted U-shaped effects of linguistic distance on migration. Longer linguistic distance encourages migration for linguistically close location pairs, but the pattern inverts as linguistic distance grows. The effects are more prominent for unskilled and older populations. To quantify welfare and distributional implications of linguistic barriers, I further develop a quantitative spatial model with heterogeneous skill groups, incorporating linguistic distance as migration and trade barriers. I find that a simulated reduction in linguistic distances by extrapolating the historical migration trend generates smaller welfare gains but improve equity more than a similar reduction in geographic barriers.

Research in Progress

Evaluating the Relocation of Indonesia's Capital: A Quantitative Spatial Model Approach 

(with Alexander Rothenberg, Radine Rafols, and Yi Jiang[New Draft Coming Soon]

This paper studies the effects of capital city relocations on population growth, economic geography, and welfare, using the recent experience of Indonesia as a case study. We first benchmark effect sizes using a synthetic controls approach to study population growth in new capitals following relocations in Tanzania, Nigeria, and Kazakhstan. We then evaluate the welfare effects of Indonesia’s new capital city with a quantitative spatial equilibrium model. The model contains multiple sectors---including public sector employment---endogenous agglomeration and dispersion forces, and a transfer system to finance local public goods.

Steering and Spatial Mismatch 

(with Tianyun Zhu[New Draft Coming Soon]

In 1968, John Kain proposed the Spatial Mismatch Hypothesis: the high unemployment rate in central cities among blacks might be due to the suburbanization of jobs combined with housing discrimination keeping blacks from relocating accordingly. We use in-person housing audit study, Housing Discrimination Study 2012, combined with rich job access data to directly test the role played by housing discrimination in the Spatial Mismatch Hypothesis. We find suggestive evidence for discriminatory steering in the housing market that denies Hispanics' access to jobs but no decisive evidence for other minorities.

Urban Sprawl and the Carbon Intensity of Living: Evidence from Indonesian Cities

(with Taylor Lathorp and Alex Rothenberg)