Essays on Shanghai: Past and Present

From an old port to the "Paris of the East" in modern history, then to today's international metropolis with a world influence, the history of Shanghai in the past one hundred and eighty years is a microcosm of the ups and downs of modern China. What has happened and what is happening in the rapidly changing city provide various settings for empirical study. This dissertation investigates Shanghai, from past to present, in the aspects of the institution, transportation, and culture, trying to explain how the city has evolved to what it is today, and point out the possible direction in which it is going.Chapter 1 examines the importance of legal systems to economic performance by focusing on a historical period from colonial Shanghai, where quite different legal systems operated in the International Settlement and French Concession. In particular, employing novel historical data, I examine 1903--1934 land value discontinuities at the border between them. Substantial discontinuities were found in the 1900s, with higher land values associated with the International Settlement. However, by the 1930s, such discontinuities had disappeared. A closer look at the institutions reveals that the French Concession adapted its operation to be more business-friendly, under competition from the neighboring International Settlement. This suggests that the French legal system per se was not a barrier to economic growth, but rather it could function well if interpreted and implemented properly. This chapter thus adds to evidence that the formal legal system is not a key determinant of economic performance.Chapter 2 studies the short-run and long-run economic consequences of the now-extinct Shanghai tramway system. Geo-locating the tramway lines on both historical cadastral maps and current google maps, I sort land parcels in the 1900s--1910s and residential complexes in 2018 into treatment and control groups based on their proximities to the tramway that opened for public transit in 1908. Utilizing historical data, a triple difference estimation indicates that the tramway system brought integration to the real estate market by connecting geographically dispersed areas. Estimation based on modern data reveals a persistent effect of the tramway lines on the nearby housing price, but only in the "periphery" that is outside the former Settlements and the Old Shanghai Town. Comparison between the effects of the tramway in the short-run and long-run thus implies that the influence of retired public transportation is decaying over time.Chapter 3 uses the hedonic pricing model to study the effects of cultural heritage on the market value of historic properties and their neighboring houses in Shanghai. Though lacking modern facilities, community management, and even necessary renovation, residential complexes that were built during the colonial era (1845-1943) are highly valued by the market and have not depreciated with age. Generally, a designated historic building is associated with a higher price and positive externalities, but being part of an ensemble with a historic ambiance plays a more important role than the designation itself