Essays in applied econometrics

This dissertation consists of three essays in applied econometrics that analyze the strategic interactions between individuals and institutions. The first chapter examines the relationship between employee benefits and the performance of startups. Using national longitudinal data on startups, I find that an increase in the share of employee benefits in total compensation packages leads to increased productivity of startups. Results indicate that a 10 percent increase in the share of employee benefits leads to an increase ranging from 1.5 to 3.9 percent in productivity even if the returns to the employee benefits are heterogeneous across startups. I also find that an increase in the share of employee benefits increases the chance of survival of startups. The second chapter investigates the dynamics of employee screening and transitions from temporary to permanent employment. I analyze unique German data that contains specific information about the dynamics of the transition from temporary to permanent employment, I find that employers screen the abilities of employees only before they hire them. I find no evidence that employers screen the cognitive ability of employees during temporary employment. The third chapter examines the relationship between housing prices and the availability of curbside parking. Using a policy change in Istanbul as a quasi-experiment, this chapter explores the effect of Istanbul’s switch from informal and free curbside parking to formal and paid curbside parking on housing prices. In a differences-in-differences model coupled with a propensity score matching, we find that an exogenous change in the availability of parking leads to a statistically significant decrease in house prices. We estimate that house prices per square meter decrease by 13 percent in the neighborhoods where the city starts charging curbside parking spaces. However, rents stay the same compared to the other neighborhoods.