This dissertation studies the US housing market, banks' behavior under regulations and effects of bank capital constraint on the monetary transmission mechanism. It revolves around understanding the determination of the capital regulations on banks' optimal behavior, as well as quantifying the impact of these regulations on the effectiveness of the monetary policy.

The first chapter, “The Impact of Local School Quality on Housing Price Volatility”, studies the effects of local school quality on housing-price booms and busts under the impact of exogenous credit-supply shocks, using school-district-level data in California between 2000 and 2012. The analysis shows that school quality, as an important amenity and utility dividend, reduces the impact of the exogenous shocks and anchors local housing values. The empirical work verifies that better schools make housing prices less volatile. The findings match the analysis of previous research in financial markets, in which there is a similarly negative association between share prices volatility and dividend yields.

The second chapter, “How Do the Minimum Capital Requirements Affect Banking Competition and Profitability?”, examines the effect of the Minimum Capital Requirements (MCR) on banks' competition and profitability. The theoretical model shows that, in competitive market, banks trade off the costs and benefits of capital to maximize their profits. The MCR are thus likely to be an important factor on the bank's optimal choice and the target ratios increase with the MCR and decrease with banks' size. This paper also adopts the Industrial Organization (IO) approach to analyze the competitive effects of MCR on the oligopolistic market. Banks may collude to hold even higher capital ratios in the oligopolistic market since the capacity constraints caused by MCR reduce the competition. Using a sample of US banks from 2002 to 2015, the empirical works reveals that the relation between capital and profitability is nonlinear; it is depicted an inverted U shape.

The third chapter, “The Effects of Capital Constraints on the Transmission of Monetary Policy: Fama-MacBeth Test”, analyzes the effects of bank capital constraint on the monetary transmission mechanism. The model demonstrates that the monetary transmission is stronger (loan supplies are more sensitive to changes in the monetary policy) if banks are well capitalized. The empirical Fama-MacBeth 2-step test reaffirms that (1) changes in monetary policy matter more for the lending of those banks with higher capital ratios; (2) The capital constraints are intensified during the period of tight money. Both effects are largely attributable to the smaller banks.

This dissertation investigates predictability in strategic air traffic management with a focus on ground delay programs (GDPs). Through a survey of flight operators, we confirm the proposition that flight operators care about predictability. We then develop models that incorporate predictability into GDP cost optimization after failing in finding an existing model that can serve this purpose. This is accomplished by modifying traditional GDP delay cost functions so that they incorporate predictability, and determining the sensitivities of the optimal planned capacity recovery time and associated cost to the unpredictability premiums included in the cost functions. To do this, we develop two stochastic GDP models: a GDP no-revision, or static, model; and a GDP revision, or dynamic, model considering one GDP revision. GDP scope, which matters only in the revision model, is also considered. The optimization results from the case study show that the cost of unpredictability clearly matters, particularly in the more realistic case where GDP revision is allowed. Of the two unpredictability cost parameters, the one for unplanned delay has a stronger impact than the one for planned un-incurred delay. The insights from this analysis might eventually be used to develop a decision support tool that air traffic managers could use in determining what the planned end time should be for a GDP in a manner that reflects the importance of predictability to flight operators.

This dissertation exams how psychology theory can be implemented into experimentaleconomics and studies the effects of human cognitive activities on their economics behaviors. It also studies how people react to job applicants with misdemeanor records and how economics outcomes can affect lying behaviors. The data used for this dissertation include self-collected data from laboratory experiments and publicly available data from U.S. government agencies. In the first chapter, I show that people with anxious attachment style tend to make economics decisions appealing to others yet people with avoidant attachment style care more about their own economics well-beings. In the second chapter, I show that marijuana possession-related misdemeanor significantly hinders one’s employment outcomes and expungement could help the situation. Although the legalization of marijuana is still an on-going process, without expunging the previous misdemeanor records related to marijuana, the legalization itself is not enough to improve the employment outcomes. In the third chapter, I show that constant moral reminders decrease dishonest behaviors whereas higher rewards lead to more deception. Moral reminders can only work to certain extent and as the rewards go higher, the effect of moral reminders gradually diminish.

The significant economic, social, and emotional costs of depression would bestow much value on a cost-effective nutritional therapy such as supplementation. Recently, a relationship between folate and depression has been observed in clinical studies and inferred from increased understanding of the role of folate in neural mechanisms involved in mood regulation. Current studies suggest that a subpopulation of depressed patients may benefit from treatment with folate supplementation. However, further studies are needed to replicate and extend these findings and to clarify the circumstances under which folate supplementation may effect a role in antidepressant therapy; only then can any routine screening criteria or treatment protocols be established.