e ztax tax salience and tax rates this paper examines whether the salience of a tax system affects equilibrium tax rates i analyze how tolls change after toll facilities adopt electronic toll collection etc drivers are substantially less aware of tolls paid electronically i estimate that in steady state tolls are 20 to 40 percent higher than they would have been without etc consistent with a salience based explanation for this toll increase i find that under etc driving becomes less elastic with respect to the toll and toll setting becomes less sensitive to the electoral calendar alternative explanations appear unlikely to be able to explain the findings

energy efficiency and financial literacy abstract financial literacy explains anomalies in a wide range of consumers financial decisions we extend the literature on financial literacy by examining its role in the purchase of energy consumer durables a setting purported to suffer from sub optimal levels of investment due to consumer mistakes we augment a standard choice experiment for purchasing a hot water system with data on financial literacy financial literacy is an economically important and statistically significant determinant of investment in energy efficiency this result is robust to incorporating individual discount rates and risk aversion as well as standard controls such as income and education indicating that financial literacy is not merely a proxy for standard demographic characteristics financial literacy also makes choices more consistent with standard consumer preferences and increases the probability that respondents select investments with the lowest lifetime discounted costs the results establish low financial literacy as a mechanism driving low investment in energy efficiency

should we be worried about the green paradox announcement effects of the acid rain program this paper presents the first empirical test of the green paradox hypothesis according to which well intended but imperfectly implemented environmental policies may lead to detrimental outcomes due to supply side responses we use the introduction of the acid rain program in the u s as a case study the theory predicts that owners of coal deposits expecting future sales to decline would supply more of their resource between the announcement of the acid rain program and its implementation moreover the incentive to increase supply would be stronger for owners of high sulfur coal this would all else equal induce an increase in sulfur dioxide emissions using data on prices heat input and sulfur content of coal delivered to u s power plants we find strong evidence of a price decrease and of an increase in the sulfur premium some indication that the amount of coal used might have increased and no evidence of fuel switching towards higher sulfur coal overall our evidence suggests that while the mechanism indicated by the theory might be at work market conditions and concurrent regulation largely prevented a green paradox from arising these results have implications for the design of climate policies

distributional and efficiency impacts of increased us gasoline taxes we examine the impacts of increased us gasoline taxes in a model that links the markets for new used and scrapped vehicles and recognizes the consider able heterogeneity among households and cars household choice parameters derive from an estimation procedure that integrates individual choices for car ownership and miles traveled we find that each cent per gallon increase in the price of gasoline reduces the equilibrium gasoline consumption by about 0 2

self serving bias and tax morale abstract in a real effort laboratory experiment we find that moral evaluation of tax evasion is subject to a self serving bias subjects with the opportunity to evade taxes judge tax evasion as less unethical as opposed to those who cannot evade

tithing and religious charitable giving in america the concept of religious tithing giving 10 or more of one s income to religious organizations permeates ancient and contemporary religious literature yet the degree to which households apply this construct in their charitable giving practices remains unclear this study examines the practice of tithing using data from a national expenditures survey including 56 663 households despite the pervasiveness of the tithing concept religious donors did not appear to be targeting a specific 10 giving level this may have resulted from varied definitions of income for tithing purposes or the presence of small charitable gifts made without reference to income while the likelihood of religious giving increased with income the likelihood of tithing fell dramatically as a group tithers had less income but were wealthier more educated older and gave more to nonreligious charity than did other households religious tithers who also gave to nonreligious charities were wealthier older and more highly educ

gasoline prices fuel economy and the energy paradox abstract policymakers often assert that consumers undervalue future gasoline costs when they buy automobiles we test this by measuring whether relative prices of vehicles with different fuel economy ratings fully adjust to variation in gasoline prices vehicle prices move as if consumers are indifferent between 1 00 in discounted future gas cost and 0 76 in vehicle purchase price we show how corrections for endogenous market shares and utilization measurement error and different gasoline price forecasts affect the results we also provide unique evidence of sticky information vehicle markets respond to changes in gasoline prices with up to a six month delay

a large scale test of the effects of time discounting risk aversion loss aversion and present bias on household adoption of energy efficient technologies abstract this paper empirically and jointly analyses the relations between standard time discounting risk aversion loss aversion and present bias and household stated adoption of low to high stake energy efficiency technologies eets light emitting diodes leds energy efficient appliances and retrofit measures the analysis relies on a large representative sample drawn from eight european union countries preferences over time risk and losses were elicited and jointly estimated from participant choices in incentivized context free multiple price list experiments the findings from econometrically estimating eet adoption equations provide some support for the hypothesis that individuals who are more loss averse or more risk averse or who exhibit a lower time discount factor are less likely to have adopted eets yet some of the results significance levels and effect sizes appeared sensitive to the addition of covariates which may be an indication of bad controls finally omitting one or several of the parameters capturing preferences over time risk and losses when estimating the eet adoption equations did not appear to cause omitted variable bias

a sparsity based model of bounded rationality this article defines and analyzes a sparse max operator which is a less than fully attentive and rational version of the traditional max operator the agent builds as economists do a simplified model of the world which is sparse considering only the variables of first order importance his stylized model and his resulting choices both derive from constrained optimization still the sparse max remains tractable to compute moreover the induced outcomes reflect basic psychological forces governing limited attention the sparse max yields a behavioral version of basic chapters of the microeconomics textbook consumer demand and competitive equilibrium i obtain a behavioral version of marshallian and hicksian demand arrow debreu competitive equilibrium the slutsky matrix the edgeworth box roy s identity and so on the slutsky matrix is no longer symmetric nonsalient prices are associated with anomalously small demand elasticities because the consumer exhibits nominal illusion in the edgeworth box the offer curve is a two dimensional surface rather than a one dimensional curve as a result different aggregate price levels correspond to materially distinct competitive equilibria in a similar spirit to a phillips curve the arrow debreu welfare theorems typically do not hold this framework provides a way to assess which parts of basic microeconomics are robust and which are not to the assumption of perfect maximization jel codes d01 d03 d11 d51

do consumers recognize the value of fuel economy evidence from used car prices and gasoline price fluctuations abstract debate about the appropriate design of energy policy hinges critically on whether consumers might undervalue energy efficiency due to myopia or some other manifestation of limited rationality we contribute to this debate by measuring consumers willingness to pay for fuel economy using a novel identification strategy and high quality microdata from wholesale used car auctions we leverage differences in future fuel costs across otherwise identical vehicles that have different current mileage and therefore different remaining lifetimes by seeing how price differences across high and low mileage vehicles of different fuel economies change in response to shocks to the price of gasoline we estimate the relationship between vehicle prices and future fuel costs our data suggest that used automobile prices move one for one with changes in present discounted future fuel costs which implies that consumers fully value fuel economy

club goods and group identity evidence from islamic resurgence during the indonesian financial crisis this paper tests a model in which group identity in the form of religious intensity functions as ex post insurance i exploit relative price shocks induced by the indonesian financial crisis to demonstrate a causal relationship between economic distress and religious intensity koran study and islamic school attendance that is weaker for other forms of group identity consistent with ex post insurance credit availability reduces the effect of economic distress on religious intensity religious intensity alleviates credit constraints and religious institutions smooth consumption shocks across households and within households particularly for those who were less religious before the crisis

the allocative cost of price ceilings in the u s residential market for natural gas a direct consequence of restricting the price of a good for which secondary markets do not exist is that in the presence of excess demand the good will not be allocated to the buyers who value it the most we demonstrate the empirical importance of this allocative cost for the u s residential market for natural gas which was subject to price ceilings during 1954 89 using a household level discrete continuous model of natural gas demand we estimate that the allocative cost in this market averaged 3 6 billion annually nearly tripling previous estimates of the net welfare loss to u s consumers

the 10 flat tax tithing and the definition of income developing a fair and widely accepted income definition presents one of the greatest challenges to tax reform to arrive at a definition separate from the federal tax code we surveyed 1200 latter day saints about their practice of tithing tithing is similar to a flat tax with no deductions where individuals voluntarily contribute 10 of self defined income to the church the results of our survey indicate that most respondents operate on a cash realization basis which excludes savings and does not allow any deductions respondents income concepts generally do not coincide with current tax laws or economists views of comprehensive income jel h24 z12 michael r ransom we recommend the passage of the income tax in the confident belief that it will meet with as much general satisfaction as any tax law all good citizens it is therefore believed will willingly and cheerfully support and sustain this the fairest and cheapest of all taxes committee report on the act authorizing the income tax u s house of representatives october 3 1913 i introduction much of the discussion on individual income taxation in the united states attacks the exceptions preferences loopholes and complexity of the internal revenue code would be reformers stress the inequities and economic defects that arise due to the current fragmented tax base and argue for a comprehensive tax on income this approach implies that an income concept exists that is generally agreed on as fair and that can meaningfully be applied to individual taxation but do ordinary people agree on what constitutes a fair definition of income and if so does the income concept match up with either the current tax code or economists views of comprehensive income how individuals believe income should be defined matters for any major reform of the u s tax code first the electorate s perceptions of what items belong in the income base may well determine what changes are politically feasible second in interpreting the sixteenth amendment the courts have historically relied on an income definition imputed to ordinary citizens in the landmark case of eisner v macomber 1920 the supreme court effectively ratified the common man s notion of income for tax purposes on the theory that the people wrote and adopted the constitution justice pitney reasoned that we require only a clear definition of the term income as used in common speech in order to determine its meaning in the amendment finally the importance of the income definition extends beyond political and statutory considerations because research suggests that the perceived fairness of the tax code also affects the degree of voluntary compliance e g roth et al 1989 slemrod 1992 and tyler 19 90 eliciting individuals beliefs about what belongs in an income base presents many challenges for example if directly asked about what is fair for tax purposes people may respond that no form of income should be taxed or may simply repeat the internal revenue code as they understand it to arrive at a self determined income definition free of such biases we administered a survey to 1200 members of the church of jesus christ of latter day saints lds church members provide unique insights into income definitions because of their practice of tithing where individuals voluntarily contribute one tenth of their income to the church because the lds church collects tithes centrally and disperses funds locally based only on average attendance at sunday services tithes do not represent entrance fees or payment for local public goods though the rate of 10 is fixed and not subject to personal interpretation the definition of which potential income sources to tithe is left to individual conscience hence aski ng questions about what items respondents think should and should not be included in tithable income provides an interesting measure of what people regard as income

shrouded attributes consumer myopia and information suppression in competitive markets bayesian consumers infer that hidden add on prices e g the cost of ink for a printer are likely to be high prices if consumers are bayesian firms will not shroud information in equilibrium however shrouding may occur in an economy with some myopic or unaware consumers such shrouding creates an inefficiency which firms may have an incentive to eliminate by educating their competitors customers however if add ons have close substitutes a curse of debiasing arises and firms will not be able to profitably debias consumers by unshrouding add ons in equilibrium two kinds of exploitation coexist optimizing firms exploit myopic consumers through marketing schemes that shroud high priced add ons in turn sophisticated consumers exploit these marketing schemes it is not possible to profitably drive away the business of sophisticates it is also not possible to profitably lure either myopes or sophisticates to nonexploitative firms we show that informational shrouding flourishes even in highly competitive markets even in markets with costless advertising and even when the shrouding generates allocational inefficiencies

the invisible hand plays dice multiple equilibria in sects markets religious participation is much more widespread in the united states than in europe while europeans tend to view sects more suspiciously than americans we propose an explanation for these patterns without assuming differences in preferences or market fundamentals we study a religious market where both demand and supply of spiritual services are endogenous such markets may have multiple equilibria further equilibria with more sects result in higher welfare and lower membership costs as secular societies tend to host on average more demanding sects

increasing carbon pricing in the eu evaluating the options abstract a streamlined model applied at the member state level is used to evaluate possibilities for greater reliance on carbon pricing to meet the european union s mitigation pledge for the paris agreement the economic welfare costs of currently envisioned policies including the emissions trading system ets requirements for energy efficiency vehicle emission rates and national targets for non ets emissions are estimated at 1 1 of eu gdp in 2030 or 167 per ton of carbon dioxide co2 reduced on net these policies lose a small amount of revenue 0 05 of eu gdp a series of reforms progressively extending emissions pricing across sectors and countries reduces costs by about 0 6 of 2030 eu gdp or 90 per ton of co2 reduced while increasing revenues by almost 1 of eu gdp higher emissions prices in the eu ets would create the largest welfare gain and no country is made worse off from this reform

the effects of the corporate average fuel efficiency standards in the us this paper examines the effects of the corporate average fuel economy standards cafe on automobile sales prices and fuel consumption first a discrete choice model of automobile demand and a continuous model of vehicle utilization are estimated using micro data from the consumer expenditure survey for 1984 1990 next the demand side model is combined with a model of oligopoly and product differentiation on the supply side with these elements in place the effects of the cafe regulation are assessed through simulations and compared to the effects of alternative policy instruments such as an increase in gasoline tax

induced innovation and energy prices this paper uses u s patent data from 1970 to 1994 to study the impact of energy prices on energy efficient innovations theories of technological change have focused both on demand side factors which spur innovative activity by increasing the value of new innovations and supply side factors such as scientific advancements that make new innovations possible data on demand side factors are easily obtained but data on supply side factors that influence innovation are not readily available this paper uses patent citations as a measure of the usefulness of the existing base of scientific knowledge citations to previous patents are used to construct productivity estimates which measure the usefulness of the existing stock of knowledge to inventors in a given energy field for any given year these estimates are then combined with data on demand side factors to estimate a model of induced innovation in energy technologies the results indicate that both energy prices and the supply of knowledge have strongly significant positive effects on innovation the paper concludes with a discussion of the implication of this work for environmental policy

carbon leakage the green paradox and perfect future markets policies of lowering carbon demand may aggravate instead of alleviate climate change green paradox in a two period three country general equilibrium model with finite endowment of fossil fuel one country enforces an emissions cap in the first or second periods when that cap is tightened the extent of carbon leakage depends on the interaction of various parameters and elasticities conditions for the green paradox are specified all determinants of carbon leakage resulting from tightening the first period cap work in the opposite direction when the second period cap is tightened tightening the second period cap does not necessarily lead to the green paradox

liquidity constraints and imperfect information in subprime lending ditions for precisely the population that is most likely to have a difficult time obtaining credit those with low incomes and poor credit histories these consumers who typically cannot qualify for regular bank loans comprise the so called subprime market because the company we study originates subprime loans its loan applications and transaction records provide an unusual win dow into the consumption and borrowing behavior of households that are rationed in primary credit markets moreover we track loan repayments allowing us to analyze the difficulties in lending to the subprime population we begin by documenting the importance of short term liquidity constraints for individuals in our sample we present two pieces of evidence both are based on purchasing behavior and indicate a high sensitivity to cash on hand first we document a dramatic degree of demand seasonality associated with tax rebates overall demand is almost 50 percent higher during tax rebate season than during other parts of the year this seasonal effect varies with household

flying more efficiently joint impacts of fuel prices capital costs and fleet size on airline fleet fuel economy abstract we investigate the factors that affect airlines choice of fleet fuel economy using aircraft level data for 1267 airlines in 174 countries larger and newer aircraft are usually more fuel efficient controlling for the effect of aircraft size and age we find that the technically achievable fleet fuel economy improves with the size of airlines and the price of fuel and worsens with higher capital costs the elasticity of fuel economy with respect to the price of fuel is between 0 07 and 0 13 we find evidence for regional differences in fleet fuel economy that are attributable to the adoption of distinct groups of technologies

fuel consumption and gasoline prices the role of assortative matching between households and automobiles abstract analyses of policies to reduce gasoline consumption have focused on two effects a compositional effect on the fuel economy of the automotive fleet and a utilization effect on how much people drive however the literature has missed a third effect a matching effect in which policies change how high utilization households are matched to fuel efficient vehicles in equilibrium we show that higher gas prices should lead to stronger assortative matching empirical estimates using us micro level data are consistent with this hypothesis we find a 0 50 increase in the gas tax would reduce us gas consumption by 0 8 through the matching effect alone bringing annual environmental benefits of about 1 7 billion

absolute abundance and relative scarcity environmental policy with implementation lags we study the effectiveness of environmental policy in a model with nonrenewable resources and an unavoidable implementation lag we find that a time lag between the announcement and the implementation of an emissions quota induces an increase in emissions in the period between the policy s announcement and implementation since a binding constraint on emissions restricts energy use during the implementation phase more of the resources must be extracted outside of it we call this the abundance effect in the case of multiple resources that differ in their pollution intensity a second channel emerges since cleaner sources are relatively more valuable when the policy is implemented it is optimal to conserve them before the cap is enforced this ordering effect tends to induce a switch to dirtier resources before the policy is implemented compounding the increase in emissions via the abundance channel using the announcement lag in title iv of the 1990 caaa as a case study we are able to empirically show that the abundance effect and ordering effect are both statistically and economically significant we discuss a number of alternative policy options to deal with these undesirable side effects of policy announcements

second best carbon taxation in the global economy the green paradox and carbon leakage revisited acceleration of global warming resulting from a future carbon tax is large if the price elasticities of oil demand are large and that of oil supply is small the fall in the world interest rate weakens this weak green paradox effect especially if intertemporal substitution is weak still social damages from greenhouse gases drop if the fall in oil supply and cumulative emissions is strong enough if the current carbon tax is set too low the second best future carbon tax is set below the first best too to mitigate adverse green paradox effects unilateral second best optimal carbon taxes exceed the first best taxes due to an import tariff component the intertemporal terms of trade effects of the future carbon tax increase current and future tariffs and those of the current tax lower the current tariff finally carbon leakage and globally altruistic and unilateral second best optimal carbon taxes if non kyoto oil importers price carbon too low are analysed in a three country model of the global economy

new hedonic technique for estimating attribute demand an application to the demand for automobile fuel efficiency a new hedonic procedure is applied to estimate the effects of gasoline price on the demand for automobile attributes and fuel efficiency direct application of a comparative statics analysis circumvents the problems of identification and severe multicollinearity affecting previous hedonic studies the results indicate that the effect of induced changes in automobile attributes in response to increases in the price of gasoline is to substantially increase fuel efficiency the estimated elasticities of fuel efficiency with respect to the price of gasoline imply that the long run own price elasticity of demand for gasoline is greater than unity 31 references

fuel prices and new vehicle fuel economy comparing the united states and western europe abstract several recent papers have documented an effect of fuel prices on new vehicle fuel economy in the united states this paper estimates the effect of fuel prices on average new vehicle fuel economy for the eight largest european markets the analysis spans the years 2002 2007 and uses detailed vehicle registration and specification data to control for policies consumer preferences and other potentially confounding factors we find fuel prices to have a statistically significant effect on average new vehicle fuel economy in europe the effect estimated for europe is much smaller than comparable estimates for the united states

searching for hidden costs a technology based approach to the energy efficiency gap in light duty vehicles abstract the benefit cost analysis of standards to reduce vehicle greenhouse gas emissions and improve fuel economy by the u s environmental protection agency epa and the department of transportation dot displays large net benefits from fuel savings for new vehicle buyers this finding points to an energy efficiency gap the energy saving technology provided in private markets appears not to include all the technologies that produce net private benefits the gap exists if the costs of energy saving technologies are lower than the present value of fuel reductions and hidden costs undesirable aspects of the new technologies do not exceed the net financial benefits this study examines the existence of hidden costs in energy saving technologies through a content analysis of auto reviews of model year 2014 vehicles results suggest that it is possible to use fuel saving technologies on vehicles without imposing hidden costs for each technology examined reviews with positive evaluations outnumbered those with negative evaluations evidence is scant of a robust relationship between vehicles use of energy saving technologies and negatively rated operational characteristics such as handling or acceleration results do not provide evidence for hidden costs as the explanation of the efficiency gap for vehicle fuel saving technologies

on the self interested use of equity in international climate negotiations abstract we discuss self interested uses of equity arguments in international climate negotiations using unique data from a world wide survey of agents involved in international climate policy we show that the perceived support of different equity rules by regions may be explained by the ranking of their economic costs despite being self interested equity arguments may be perceived as being used for different reasons for example out of fairness considerations or in order to facilitate negotiations consistent with experimental and behavioral studies on fairness perceptions we find that individuals are more likely to state reasons with positive attributes if they evaluate their own region or regions that support the individual s personally preferred equity rule negotiators perceive the use of equity by regions as less influenced by pressure from interest groups

making the implicit explicit a look inside the implicit discount rate implicit discount rates idrs are employed in energy models to capture household investment decisions yet the factors behind the idr and their respective implications for policy making usually remain blurred and fractional the proposed comprehensive framework distinguishes three broad categories of factors underlying the idr for household adoption of energy efficient technologies eets preferences notably over time risk loss debt and the environment predictable ir rational behavior bounded rationality rational inattention behavioral biases and external barriers to energy efficiency existing empirical findings suggest that the factors underlying the idrs that differ across household characteristics and technologies should be accounted for in energy models furthermore the framework allows for a fresh look at the interplay of idrs and policies we argue that a simple observation of high idrs or observing correlations between idrs and socio economic characteristics does not provide guidance for policy making since the underlying sources cannot be identified instead we propose that some of the factors underlying the idr notably external barriers can be changed through directed policy interventions whereas other factors notably preferences and predictable ir rational behavior are innate and can only be taken into account through reactive policy interventions

is there really a green paradox abstract in the absence of a co2 tax the anticipation of a cheaper renewable backstop increases current emissions of co2 since the date at which renewables are phased in is brought forward and more generally future emissions of co2 will decrease the effect on global warming is unclear green welfare falls if the backstop is relatively expensive and full exhaustion of fossil fuels is optimal but may increase if the backstop is sufficiently cheap relative to the cost of extracting the last drop of fossil fuels plus marginal global warming damages as then it is attractive to leave more fossil fuels unexploited and thus limit co2 emissions we establish these results by analyzing depletion of non renewable fossil fuels followed by a switch to a clean renewable backstop paying attention to timing of the switch and the amount of fossil fuels remaining unexploited we also discuss the potential for limit pricing when the non renewable resource is owned by a monopolist finally we show that if backstops are already used and more backstops become economically viable as the price of fossil fuels rises a lower cost of the backstop will either postpone fossil fuel exhaustion or leave more fossil fuel in situ thus boosting green welfare however if a market economy does not internalize global warming externalities and renewables have not kicked in yet full exhaustion of fossil fuel will occur in finite time and a backstop subsidy always curbs green welfare

fiscal policy and co2 emissions of new passenger cars in the eu to what extent have national fiscal policies contributed to the decarbonisation of newly sold passenger cars we construct a simple model that generates predictions regarding the effect of fiscal policies on average hbox co 2 emissions of new cars and then test the model empirically our empirical strategy combines a diverse series of data first we use a large database of vehicle specific taxes in 15 eu countries over 2001 2010 to construct a measure for the vehicle registration and annual road tax levels and separately for the hbox co 2 sensitivity of these taxes we find that for many countries the fiscal policies have become more sensitive to hbox co 2 emissions of new cars we then use these constructed measures to estimate the effect of fiscal policies on the hbox co 2 emissions of the new car fleet the increased hbox co 2 sensitivity of registration taxes have reduced the hbox co 2 emission intensity of the average new car by 1 3 partly through an induced increase of the share of diesel fuelled cars by 6 5 percentage points higher fuel taxes lead to the purchase of more fuel efficient cars but higher diesel fuel taxes also decrease the share of more fuel efficient diesel cars higher annual road taxes have no or an adverse effect

optimal taxation when people do not maximize well being abstract i derive the optimal nonlinear income tax when individuals do not necessarily maximize their own well being this generates a corrective argument for taxation optimal marginal taxes are higher lower if individuals work too much too little from a well being point of view i allow for multidimensional heterogeneity and derive the optimal tax schedule in terms of measurable sufficient statistics one of these statistics measures the degree to which individuals fail to optimize their labor supply i empirically estimate this by using british life satisfaction data as a measure of well being i find that low income workers tend to work too little and high income workers too much providing a motive for lower marginal tax rates at the bottom and higher marginal tax rates at the top of the income distribution

testing the sticky information phillips curve abstract i consider the empirical evidence for the sticky information model relative to the basic sticky price model conditional on historical measures of inflation forecasts the estimated structural parameters are inconsistent with an underlying sticky information model and the sticky information phillips curve is statistically dominated by the new keynesian phillips curve i find that the poor performance of the sticky information approach is driven by two key elements first the sticky information model underestimates inflation in the 1970s and overestimates inflation since the 1980s second predicted inflation from the sticky information model is excessively smooth

energy efficiency and household behavior the rebound effect in the residential sector over the years various efficiency policies have been designed and implemented to reduce residential energy consumption however it is very common that the policy expectations that are based upon engineering calculations do not come true the widely accepted explanation for the gap between expectation and the realization is the change of household behavior as the energy efficiency gains change the perceived cost of energy services and thereby generate shifts in consumption patterns the rebound effect the real controversy about the rebound effect lies in the identification of its magnitude in this paper we estimate the rebound effect in residential energy consumption by comparing the actual gas consumption levels with the ex ante predictions within a sample of well over 600 000 dutch dwellings and households we find a significant deviation between the engineering predictions and the households actual energy consumption a difference which varies by ownership wealth income and the actual gas use intensity our results show a rebound effect of 26 7 percent among home owners and 41 3 percent among tenants moreover we find that these effects are greatest among the lower income wealth groups and among households that tend to use more gas than average

fossil fuels stock externalities and backstop technology the hotelling exhaustible resource model is extended to include stock pollution and nonpolluting backstop technology it is shown that an optimal energy consumption strategy typically includes a regime in which the two energy sources are consumed simultaneously along this regime fossil fuel consumption decreases and backstop consumption increases together fossil fuel and backstop consumption may form eleven optimal regime combinations a decrease in the backstop price decreases the initial level of optimal emission tax

does where you stand depend on where you sit tithing donations and self serving beliefs economists and psychologists argue that individuals skew personal beliefs to accord with their own interests to test for the presence of self serving beliefs we surveyed 1 200 members of the mormon church about tithing a tithe is a voluntary contribution equal to 10 percent of income since respondents must decide privately what income items to tithe we observe how the income definition depends on an individual s religious and financial incentives we find surprisingly little evidence that an individual s financial situation influences beliefs about what counts as income for the tithe however ambiguity increases the role for self serving biases jel a12 d63

automobile externalities and policies this paper discusses the nature and magnitude of externalities associated with automobile use including local and global pollution oil dependence traffic congestion and traffic accidents it then discusses current federal policies affecting these externalities including fuel taxes fuel economy and emissions standards and alternative fuel policies summarizing insofar as possible the welfare effects of those policies finally we discuss emerging pricing policies including congestion tolls and insurance reform and summarize the appropriate combination of policies to address automobile externalities

feebates rebates and gas guzzler taxes a study of incentives for increased fuel economy abstract us fuel economy standards have not been changed significantly in 20 years feebates are a market based alternative in which vehicles with fuel consumption rates above a pivot point are charged fees while vehicles below receive rebates by choice of pivot points feebate systems can be made revenue neutral feebates have been analyzed before this study re examines feebates using recent data assesses how the undervaluing of fuel economy by consumers might affect their efficacy tests sensitivity to the cost of fuel economy technology and price elasticities of vehicle demand and adds assessments of gas guzzler taxes or rebates alone a feebate rate of 500 per 0 01 gallon per mile gpm produces a 16 percent increase in fuel economy while a 1000 per 0 01 gpm results in a 29 percent increase even if consumers count only the first 3 years of fuel savings unit sales decline by about 0 5 percent but sales revenues increase because the added value of fuel economy technologies outweighs the decrease in sales in all cases the vast majority of fuel economy increase is due to adoption of fuel economy technologies rather than shifts in sales

the economic cost of global fuel subsidies by 2015 global oil consumption will reach 90 million barrels per day in part this high level of consumption reflects the fact that many countries provide subsidies for gasoline and diesel this paper examines global fuel subsidies using the latest available data from the world bank finding that road sector subsidies for gasoline and diesel totaled 110 billion in 2012 pricing fuels below cost is inefficient because it leads to overconsumption under baseline assumptions about supply and demand elasticities the total annual deadweight loss worldwide is 44 billion incorporating external costs increases the economic costs substantially

electric vehicles rising from the dead data needs for forecasting consumer response toward sustainable energy sources in personal transportation abstract since standard vehicles are powered by internal combustion mechanisms that rely on fossil fuels electric vehicles that are propelled by one or more electric engines have been proposed as an alternative to promote sustainable personal transportation in this paper we propose a general demand model for vehicle purchases at the individual level assuming that the necessary microdata is available we then list the ideal microdata that would be needed for estimating this general demand model for elaborating this list we take into account the particularities of low emission vehicles with emphasis in their cost reliability environmental benefits tradeoff as well as the potentiality for evaluation of welfare improving policies related to adoption of energy efficient technologies we discuss data sources and collection strategies for the different attributes of the model especially for those characteristics that are nonstandard such as symbolic values for instance we discuss the role of range anxiety as a barrier of adoption of electric vehicles and the implied relevance of including driving range to get consumers willingness to pay for better performing electric batteries

what do we learn from the price of crude oil futures summary despite their widespread use as predictors of the spot price of oil oil futures prices tend to be less accurate in the mean squared prediction error sense than no change forecasts this result is driven by the variability of the futures price about the spot price as captured by the oil futures spread this variability can be explained by the marginal convenience yield of oil inventories using a two country multi period general equilibrium model of the spot and futures markets for crude oil we show that increased uncertainty about future oil supply shortfalls under plausible assumptions causes the spread to decline increased uncertainty also causes precautionary demand for oil to increase resulting in an immediate increase in the real spot price thus the negative of the oil futures spread may be viewed as an indicator of fluctuations in the price of crude oil driven by precautionary demand an empirical analysis of this indicator provides evidence of how shifts in the uncertainty about future oil supply shortfalls affect the real spot price of crude oil copyright 2010 john wiley sons ltd

output and attribute based carbon regulation under uncertainty abstract output based carbon regulations such as fuel economy standards and the rate based standards in the clean power plan create well known incentives to inefficiently increase output similar distortions are created by attribute based regulations this paper demonstrates that despite these distortions output and attribute based standards can always yield strictly greater expected welfare than flat emission standards given uncertainty in demand for output or attributes assuming locally constant marginal damages for fuel economy standards the welfare maximizing amount of attribute or mileage basing is likely small relative to current policy for the electricity sector however an intensity standard may yield greater expected welfare than a flat standard

the price of energy efficiency in the spanish housing market the housing sector is a substantial consumer of energy and therefore a focus for energy savings efforts the energy performance certificate epc is the main eu policy to improve the energy performance of buildings following the implementation of the epc directive into spanish law from june 2013 all properties offered for sale or rented out in spain are required to have an epc given that this is a recently introduced regulation unlike other european housing markets the spanish one lacks market data on energy efficiency ee labels and their impact on housing price in order to overcome this gap we determine the ee ratings of a sample of 1 507 homes across spain on the basis of information collected previously through household surveys this information allowed us to answer the question of whether or not and to what extent spanish housing markets capitalise the value of ee we apply the hedonic price technique and observe that more energy efficient dwellings meaning higher ee rating have a price premium between 5 4 and 9 8 compared to those with the same characteristics but lower ee level

gasoline price uncertainty and the design of fuel economy standards abstract what are the implications of gasoline price volatility for the design of fuel economy policies i show that this problem has a strong parallel to weitzman s 1974 classic model of using price or quantity controls to regulate an externality changes in fuel prices act as shocks to the marginal cost of complying with the standard assuming constant marginal damages from fuel consumption an application of weitzman 1974 implies that a fixed fuel economy standard reduces expected welfare relative to a price policy such as a feebate or equivalently a fuel economy standard that is indexed to the price of gasoline when the regulator is constrained to use a fixed standard i show that the usual approach to setting the standard equate expected marginal compliance cost to marginal damage is likely to be sub optimal because the standard may not bind if the realized gasoline price is sufficiently high instead the optimal fixed standard will be relatively relaxed and may be non binding even at the expected gasoline price finally i show that although an attribute based standard allows vehicle choices to flexibly respond to gasoline price shocks the resulting distortions imply that the optimal fuel economy standard is not attribute based

systematically biased beliefs about economics robust evidence of judgemental anomalies from the survey of americans and economists on the economy differences between the general public s positive economic views and economists resemble other judgemental anomalies laypeople and experts systematically disagree i analyse this puzzle using data from the survey of americans and economists on the economy the paper first tests and decisively rejects the hypothesis that the differences solely reflect economists self serving bias then it examines whether economists political ideology and party loyalties explain the disagreement if anything this slightly increases their magnitude the effect of economic training clearly falls but remains large after adding education to the set of control variables apparent biases robustness suggests that the anomaly is real

market driven automotive industry compliance with fuel economy and greenhouse gas standards analysis based on consumer choice this study explored factors that affect market driven compliance with both corporate average fuel economy cafe and greenhouse gas ghg standards together called the national program in the united states for phase i 2012 2016 and phase ii 2017 2025 we considered a consumer choice based simulation approach using the ma3t model to estimate the market acceptance of fuel efficiency fe technologies and alternative fuel technologies as reflected by new sales of light duty vehicle ldv because both full and extremely low fe valuations are common in the literature we use a moderate assumption of a 10 year perceived vehicle lifetime at a 7 annual discount rate in the baseline and include both extreme views 5 years and 15 years in the sensitivity analysis the study focuses on market driven compliance and therefore excludes manufacturers cross subsidization the model results suggest that the ldv industry is able to comply with both standards even without cross subsidization and with projected high technology cost mainly thanks to the multiple credit programs and technology advancements the compliance robustness while encouraging however is based on moderate market assumptions such as annual energy outlook 2016 reference oil price projection and moderate fe consumer valuation sensitivity analysis results reveal two significant risk factors for compliance low oil prices and consumers fe undervaluation

emission regulation of markets with sluggish supply structures i examine regulation in the presence of convex investment costs and technology specific capacity stocks announcement of future emission taxes reduces current emissions unless fossil fuels are scarce in which case the effect is ambiguous substantial future emission reductions require action today because it takes time to build up clean production capacity and phase out dirty capacity the pigou tax must be coupled with sector specific investment taxes or subsidies to induce the socially optimal trajectory if the private discount rate differs from the social discount rate if such investment taxes or subsidies are unavailable a time inconsistent second best alternative may be to tax emissions above the pigouvian level during the transition phase the theory is complemented with a stylized numerical model of the us electricity market

how sensitive are consumer expenditures to retail energy prices abstract there is growing evidence that the primary effect of energy price shocks on the u s economy involves a reduction in consumer spending we quantify the direct effect on real consumption of unanticipated changes in discretionary income shifts in precautionary savings and changes in the operating cost of energy using durables the possibility of asymmetries in the response of real consumption to energy price shocks is also considered we demonstrate that linear models are consistent with the symmetric behavior of real consumption in 1979 when energy prices increased sharply and in 1986 when they fell sharply it is shown that historically energy price shocks have been an important factor in explaining u s real consumption growth but by no means the dominant factor

do energy prices influence investment in energy efficiency evidence from energy star appliances abstract i examine whether electricity prices influence the likelihood that consumers purchase high efficiency appliances by using state year panel data on electricity prices and the proportion of sales of new appliances that involve high efficiency energy star models i find no evidence that electricity prices affect the propensity for consumers to choose high efficiency appliances point estimates are extremely small and precisely estimated the findings suggest that price based energy policies may be limited in the extent to which they increase investment in residential energy efficiency which has been considered one of the lowest cost opportunities for reducing carbon emissions

turnover of used durables in a stationary equilibrium are older goods traded more this paper develops a dynamic model with transaction costs to determine the equilibrium resale pattern in a market for a durable good the key result is that the probability of resale is nonmonotonic in the age of the good trade volume is relatively low in the very beginning and in the middle of a good s life this result helps explain observed variations of resale rates across vintages for the u s market of used cars

the impact of charitable subsidies on religious giving and attendance evidence from panel data the literature documents that charitable giving is responsive to tax subsidies but often ignores the spillover effects of such policies this paper investigates the spillover effects of charitable subsidies on religious participation using individual level panel data the results show that religious giving and participation are complements the implied cross price elasticity of religious participation with respect to the after tax price of giving is 0 27 furthermore a 1 increase in the amount of religious contributions is associated with a 0 4 increase in religious attendance these results are robust under several different specifications and highlight the positive externalities created by charitable subsidies

vehicle miles not traveled fuel economy requirements vehicle characteristics and household driving abstract a major concern with addressing the negative externalities of gasoline consumption by regulating fuel economy rather than increasing fuel taxes is that households respond by driving more this paper exploits a discrete threshold in the eligibility for cash for clunkers to show that fuel economy restrictions lead households to purchase vehicles that have lower cost per mile but are also smaller and lower performance whereas the former effect can increase driving the latter effect can reduce it results indicate that these households do not drive more suggesting that behavioral responses do not necessarily undermine the effectiveness of fuel economy restrictions at reducing gasoline consumption

the economics of attribute based regulation theory and evidence from fuel economy standards in many countries fuel economy standards mandate that vehicles meet a certain fuel economy but heavier or larger vehicles are allowed to meet a lower standard this has the perverse implication of allowing automakers to meet standards either by improving fuel economy or by increasing weight which lowers fuel economy and increases externalities related to accidents this is but one example of an attribute based regulation in which the regulation imposed on a product depends on both the externality it creates and some other attribute attribute basing potentially motivates rms and individuals to strategically alter the attribute thereby endogenously altering the stringency of the regulation this paper develops a theory of attribute basing to demonstrate the costs and benets of its use the paper then empirically examines the consequences of attribute based fuel economy standards in japan where fuel economy standards are a notched attribute based function of vehicle weight we use cross sectional and panel techniques to demonstrate that attribute based regulation has signicantly altered the distribution of vehicle weight in japan where 10 of vehicles bunch at weight notches for cars whose weight is altered in response to the policy we estimate that the alteration generates a welfare loss from the exacerbation of weight related externalities of 1 500 per unit sold which translates into a 700 million annual loss across the japanese auto market

predicting gasoline prices using michigan survey data abstract this study investigates the predictive power of michigan surveys of consumers msc data for gasoline prices specifically we utilize the msc data on both expected inflation and consumer sentiment to construct a vector autoregressive var model for forecasting gasoline prices for 2003 2014 our findings indicate that the var forecasts are superior to the comparable benchmark forecasts obtained from a univariate integrated moving average ma model in terms of both predictive information content and directional accuracy as such we conclude that the msc data on both expected inflation and consumer sentiment have significant predictive information for gasoline prices further inspection reveals that the var forecasts are particularly accurate for the period since 2008 reinforcing the notion that consumers are economically rational

are consumers myopic evidence from new and used car purchases abstract we investigate whether car buyers are myopic about future fuel costs we estimate the effect of gasoline prices on short run equilibrium prices of cars of different fuel economies we then compare the implied changes in willingness to pay to the associated changes in expected future gasoline costs for cars of different fuel economies in order to calculate implicit discount rates using different assumptions about annual mileage survival rates and demand elasticities we calculate a range of implicit discount rates similar to the range of interest rates paid by car buyers who borrow we interpret this as showing little evidence of consumer myopia jel d12 h25 l11 l62 l71 l81

automobile prices in market equilibrium with unobserved price discrimination in markets where sellers are able to price discriminate or the buyers to bargain individuals receive discounts over the posted prices that are usually not observed by the econometrician this paper considers the structural estimation of a demand and supply model a la berry et al 1995 when only posted prices are observed we consider that heterogeneous discounts occur due to price discrimination by firms on observable characteristics of consumers within this framework identification is achieved by assuming that the marginal costs of producing and selling the goods do not depend on the characteristics of the buyers we also require a condition relating the posted prices to the prices actually paid for instance we can assume that at least one group of individuals pays the posted prices under these two conditions the demand and supply parameters as well as the exact discounts corresponding to each type of consumers can be identified we apply our methodology to estimate the demand and supply in the new automobile market in france results suggest that discounting arising from price discrimination is important the average discount is estimated to be 10 5 with large variation depending on the buyers characteristics and cars specifications our results are in line with discounts generally observed in european and american automobile markets

implications of rational inattention abstract a constraint that actions can depend on observations only through a communication channel with finite shannon capacity is shown to be able to play a role very similar to that of a signal extraction problem or an adjustment cost in standard control problems the resulting theory looks enough like familiar dynamic rational expectations theories to suggest that it might be useful and practical while the implications for policy are different enough to be interesting

consumers perceptions and misperceptions of energy costs this paper presents three initial stylized facts from the vehicle ownership and alternatives survey voas a nationally representative survey that elicits consumers beliefs about gasoline prices and the relative energy costs of autos with different fuel economy ratings first american consumers devote little attention to fuel costs when purchasing autos second consistent with a cognitive bias called mpg illusion consumers underestimate the fuel cost differences between low mpg vehicles and overestimate the differences between high mpg vehicles third americans mean and median expected future gas prices were above current prices and predictions of the futures market at the time of the survey although it is often argued that misperceived energy costs justify policies to encourage the sale of energy efficient durable goods these results show that misperceptions and expectations that differ from market information could either increase or decrease energy efficiency

vehicle scrappage and gasoline policy abstract we estimate the sensitivity of scrap decisions to changes in used car values and show how this scrap elasticity produces emissions leakage under fuel efficiency standards a process known as the gruenspecht effect we first estimate the effect of gasoline prices on used vehicle values and scrappage of vehicles with different fuel economies we then estimate the scrap elasticity itself which we find to be 0 7 when applied in a model of fuel economy standards 13 16 percent of the expected fuel savings leak away through the used vehicle market this effect rivals or exceeds the importance of the often cited mileage rebound effect jel h23 l62 l78 q35 q38 q48 q58

stationary equilibrium in a market for durable assets this paper presents a dynamic model of consumer trading on the primary secondary and scrap markets for a stochastically deteriorating durable good in a stationary economy with perfect information and no transaction costs we explicitly model the trading process by tracking each durable from its birth in the primary market through its sequence of owners in the secondary market until its death in the scrap market we prove that a stationary equilibrium exists characterize the distribution of consumer holdings of durables and show that equilibrium asset prices are shadow prices to a particular regenerative optimal stopping problem we show that each heterogeneous agent equilibrium is observationally equivalent to a homogeneous agent equilibrium we derive a differential equation for equilibrium rental rates and a functional equation which links rental rates to asset prices these equations show precisely how the structure of durable prices and rental rates embody the functional form and population distribution of preferences and the technological characteristics of durable goods this abstract was borrowed from another version of this item

climate policy with tied hands optimal resource taxation under implementation lags in the presence of implementation lags announced pigouvian taxation leads to fossil fuel prices that are too low from society s perspective this results in excessive emissions and reduced incentives for green innovation such effects are compounded by the presence of pre existing subsidies to fossil fuel use we show that the intertemporal resource tax path may need to be modified to optimally take into account the perverse incentives from policy lags and pre existing policies we find that it might be optimal to subsidize rather than tax resource extraction at the instant of implementation

rates of time preference and consumer valuations of automobile safety and fuel efficiency this article estimates hedonic price models for automobiles using a data set on almost 3 000 households from the u s department of energy residential transportation energy consumption survey the standard hedonic models are generalized to recognize the role of discounting of fuel efficiency and safety yielding an estimated rate of time preference ranging from 11 to 17 percent this range includes the prevailing rate of interest for car loans in 1988 and is consequently consistent with market rates purchasers exhibit an implicit value of life ranging from 2 6 to 3 7 million which is within the range found in the labor market as well as other market contexts the model also estimates a significant price effect for auto injury risks and fuel efficiency

increasing the influence of co 2 emissions information on car purchase in response to concerns related to climate change and an attempt to encourage more sustainable behavior individuals are often provided with information on greenhouse gas emissions ghgs of consumer items such as personal vehicles currently in the us information on vehicle efficiency is provided as grams of carbon dioxide co2 per mile previous research presenting co2 as a mass and testing willingness to pay through discrete choice experiment has found that such information can influence vehicle choice however other research has questioned whether how this information is presented might affect choice that research argues that co2 emission information generally lacks contextualization that allows for interpretation as well it argues that the type of contextualization may affect choices that research though did not test willingness to pay and the strength of its influence is not clear in addition research exists that argues that using pro social as opposed to financial contextualization might be more influential on people s choices thus the purpose of this paper is to build on these previous findings on how co2 emissions are presented to determine whether changing how that information impacts vehicle choice with a discrete choice experiment of vehicle choice analyzed using latent class modeling no previous study has so robustly studied the influence that different framings might have on vehicle purchase five different methods of presenting co2 information are tested in this experiment co2 emissions as grams per mile current method co2 emissions as pounds per year consistent imperial units co2 emissions as tons per year yearly contextualization an annual tax on co2 yearly financial contextualization and co2 as a percentage of the 2025 us epa reduction target of 26 from 2005 levels social goal contextualization results demonstrate that the current method results in lowest willingness to pay for co2 emission reductions while the social goal contextualization results in the highest

anticipation tax avoidance and the price elasticity of gasoline demand summary least squares estimates of the response of gasoline consumption to a change in the gasoline price are biased toward zero given the endogeneity of gasoline prices a seemingly natural solution to this problem is to instrument for gasoline prices using gasoline taxes but this approach tends to yield implausibly large price elasticities we demonstrate that anticipatory behavior provides an important explanation for this result gasoline buyers increase purchases before tax increases and delay purchases before tax decreases rendering the tax instrument endogenous including suitable leads and lags in the regression restores the validity of the iv estimator resulting in much lower elasticity estimates copyright 2016 john wiley sons ltd

impacts of fuel economy improvements on the distribution of income in the u s abstract we estimate the impacts of passenger car and light truck fuel economy improvements in the u s since 1975 on the real monetary incomes of u s households by income quintile over the period 1980 2014 we limit our analysis to the direct monetary impacts fuel savings minus increased vehicle costs and do not attempt a full welfare analysis we include all vehicle purchases new and used household fuel expenditures come from the u s consumer expenditures surveys ces costs of increased new passenger car and light truck fuel economy were obtained from four national research council nrc studies plus a literature review of earlier estimates the nrc cost functions provide a unique time series of technology supply functions constructed by balanced expert panels and comprised of specific technologies proven to increase fuel economy effects of fuel economy improvements on used vehicle prices are based on an analysis of the ces data retrospective analysis indicates that all income quintiles received net savings and that the effect on the distribution of income was progressive a prospective analysis of future fuel economy improvements produced similar results sensitivity analysis indicates that these findings are relatively robust

overcoming salience bias how real time feedback fosters resource conservation inattention and imperfect information bias behavior toward the salient and immediately visible this distortion creates costs for individuals the organizations in which they work and society at l

automobile prices and quality did the gasoline price increases change consumer tastes in the u s a hedonic model of automobile prices that takes gasoline costs into account is developed and used to examine whether gasoline price increases especially those related to the 1973 and 1979 oil shocks changed consumer evaluations of the relative qualities of used cars in the u s during 1970 1981 we test the null hypothesis that the characteristics coefficients remained constant over time it is rejected if gasoline costs are excluded from the model but not if they are included alternative approaches are developed to show that the gasoline price increases alone can explain much of the observed changes in the coefficients

estimates of the sticky information phillips curve for the united states mankiw and reis 2002 have proposed a sticky information based phillips curve sipc to address some of the concerns with the sticky price based new keynesian phillips curve in this paper we present a methodology to empirically implement the sipc and estimate its key structural parameter the degree of information stickiness for the united states using this methodology we estimate average durations of information stickiness that range from three quarters on the low side to over seven quarters on the high side

consumer myopia imperfect competition and the energy efficiency gap evidence from the uk refrigerator market abstract the empirical literature on the energy efficiency gap concentrates on demand inefficiencies in the energy using durables markets and finds evidence that consumers underestimate future energy costs when purchasing a new appliance we take a broader view and also consider the impact of imperfect competition using data on the uk refrigerator market 2002 2007 we find that the average energy consumption of appliances sold during this period was only 7 2 higher than what would have been observed under a scenario with a perfectly competitive market and non myopic consumers one reason for this small gap is that market power actually reduces energy use

sticky information and sticky prices abstract in the u s and europe prices change at least once a year yet nominal macro shocks seem to have real effects lasting well beyond a year sticky information models as posited by mankiw and reis 2002 sticky information versus sticky prices a proposal to replace the new keynesian phillips curve quarterly journal of economics 117 1295 1328 sims 2003 implications of rational inattention journal of monetary economics 50 3 665 690 and woodford 2003 princeton university press princeton nj can reconcile micro flexibility with macro rigidity we simulate a sticky information model in which price setters update information on macro shocks less frequently than information on micro shocks we then examine price changes in the micro data underlying the u s cpi empirical price changes react to old information just as sticky information models predict

sorting in the used car market after the volkswagen emission scandal the disclosure of the vw emission manipulation scandal caused a quasi experimental market shock in the observable quality of vw diesel vehicles we consider a classical model for adverse selection and sorting to derive an empirically testable hypothesis about the impact of observable quality on the supply of used cars we test the hypothesis with data collected from an online car selling platform which reflects about 50 of the german used car market the empirical approach is based on a conditional difference in differences method we find that the supply of used vw diesel vehicles increases after the vw emission scandal this finding is consistent with the predictions of the theoretical model furthermore we find the positive supply effects increase with the probability of manipulation

gasoline prices and the used automobile market a rational expectations asset price approach this paper examines the impact of changes in gasoline price expectations on the market values of used automobiles an asset model of automobile valuation is used to relate year to year changes in market values to changes in the present discounted value of gasoline expenses econometric evidence from data covering the years 1972 through 1981 substantially confirms the hypothesis of the model that a gasoline price shock causes relative price changes across automobile types in proportion to the differences in their rates of fuel consumption

asymmetric information in residential rental markets implications for the energy efficiency gap abstract this paper explores whether energy cost information asymmetries exist between landlords and tenants by exploiting variation in which party pays for energy because tenants are always fully informed about their total housing costs in the landlord pay regime the effect of energy cost changes on tenant turnover rents and efficiency investment should differ between the two payment regimes under asymmetric information but not symmetric information using energy cost variation in the form of changes in relative heating fuel prices i find evidence that tenants are uninformed about energy costs this results in higher energy expenditures for tenants and implies that information campaigns or efficiency standards may improve market outcomes

pay or pray the impact of charitable subsidies on religious attendance abstract the economic argument for subsidizing charitable giving relies on the positive externalities of charitable activities particularly from the religious institutions that are the largest recipients of giving but the net external effects of subsidies to religious giving will also depend on a potentially important indirect effect as well impacts on religious participation religious participation can be either a complement to or a substitute with the level of charitable giving understanding these spillover effects of charitable giving may be quite important given the existing observational literature that suggests that religiosity is a major determinant of well being among americans in this paper i investigate the impact of charitable subsidies on a measure of religious participation attendance at religious services i do so by using data over three decades from the general social survey as well as confirming the impact of such subsidies on religious giving using the consumer expenditure survey i find strong evidence that religious giving and religious attendance are substitutes larger subsidies to charitable giving lead to more religious giving but less religious attendance with an implied elasticity of attendance with respect to religious giving of as much as 1 1 these results have important implications for the debate over charitable subsidies they also serve to validate economic models of religious participation

identifying the causal effect of income on religiosity using the earned income tax credit abstract how do economic conditions income and the generosity of social insurance affect religious behavior this paper provides novel evidence for the united states using variation in earned income tax credit benefits across states over time and by number of children in the raw data income and religiosity have a trivial relationship in contrast the instrumental variables strategy shows that increases in income from the eitc are found to sizably reduce religious attendance among low income individuals among individuals who attend the results indicate that an additional 1000 in annual income is associated with a decrease of roughly 1 service per year as compared to an average of 16 services per year the effect arises mainly along the intensive margin decreasing devout behavior and increasing more marginal attendance but having little impact on whether an individual participates at all or on beliefs there are also minimal effects on the occurrence and amount of contributions to religious organizations the results extend our understanding of the determinants of religiosity the relationship between governmental income support and religious behavior and the social effects of the earned income tax credit

the value of energy efficiency and the role of expected heating costs the german energy performance of buildings directive requires sellers on the housing market to provide detailed information on expected yearly energy consumption per square meter energy performance eps this paper uses variation in local fuel prices and climate fuel types and building ages to analyse the relationship between expected energy cost savings from energy efficient building structure and house prices in a data set of listing prices from all regions of germany results suggest that heating cost considerations are less relevant than previously thought

choice inconsistencies among the elderly evidence from plan choice in the medicare part d program we evaluate the choices of elders across their insurance options under the medicare part d prescription drug plan using a unique data set of prescription drug claims matched to information on the characteristics of choice sets we document that elders place much more weight on plan premiums than on expected out of pocket costs value plan financial characteristics beyond any impacts on their own financial expenses or risk and place almost no value on variance reducing aspects of plans partial equilibrium welfare analysis implies that welfare would have been 27 higher if patients had all chosen rationally

deception the role of uncertain consequences abstract we study how decisions to lie extend to risky environments we provide experimental evidence from a sender receiver game where there is uncertainty over the amount by which a sender s lie reduces its receiver s payoff which is known only to potential liar even though all reduction amounts are equiprobable ex post beliefs elicited from senders suggest that unlike truth tellers most liars underestimate the extent of the actual reduction in the receiver s payoff and appear to exploit this self serving bias resulting in substantially more lying relative to a baseline treatment without the uncertainty subsequent treatments confirm the bias by either providing additional evidence or by removing possible confounds an intervention treatment nudging senders toward correcting the bias reduces lying