This thesis consists of three independent essays on environmental and urban economics.The first two essays on environmental economics share a common setting in Ethiopia. Essay one explores the economic impact of two subsequent droughts in Ethiopia on farming households. The second essay takes advantage of the same household survey data to analyze the impact of peer-choices on the decision to adapt to climate change. Finally, the third essay examines the impact of the Interstate Highway System constructed between the 1950s and 1990s in the United States (US) on racial segregation.