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

survey evidence on the willingness of u s consumers to pay for automotive fuel economy abstract prospect theory holds that human beings faced with a risky bet will tend to value potential losses about twice as much as potential gains previous research has demonstrated that prospect theory could be sufficient to explain an energy paradox in the market for automotive fuel economy this paper analyzes data from questions added to four commercial multi client surveys of 1000 u s households each in 2004 2011 2012 and 2013 households were asked about willingness to pay for future fuel savings as well as the annual fuel savings necessary to justify a given upfront payment payback periods inferred from household responses are generally consistent over time and across different formulations of questions mean calculated payback periods are about 3 years but there is substantial dispersion among individual responses the calculated payback periods do not appear to be correlated with the attributes of respondents respondents were able to quantitatively describe their uncertainty about both vehicle fuel economy and future fuel prices simulation of loss averse behavior based on respondents stated uncertainty illustrates how loss aversion could lead consumers to substantially undervalue future fuel savings relative to their expected value

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

adverse selection commitment and renegotiation extension to and evidence from insurance markets with asymmetric information full commitment to long term contracts may permit markets to approach first best allocations however commitment can be undermined by opportunistic behavior notably renegotiation we reexamine commitment in insurance markets we present an alternative model which extends laffont and tirole s procurement model to address uncertainty and competition which involves semipooling in the first period followed by separation this and competing models e g single period models and no commitment models have different predictions concerning temporal patterns of insurer profitability a test using california data suggests that some automobile insurers use commitment to attract selective portfolios comprising disproportionate numbers of low risks

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

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

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

adverse selection repeated insurance contracts and announcement strategy in this note we present a strategy which relies on multi period contracts and on a self selection mechanism which induces the insured to announce his true risk in the first period thus eliminating inefficiency due to adverse selection

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

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

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

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

inter generational effects of titling programmes physical vs human capital abstractprogrammes aimed at giving legal ownership titles to the occupants of land titling programmes are associated with an income or wealth effect that induce higher expenditure on normal goods like education and health services there is also a substitution effect the elimination of expropriation risk makes home investment more attractive and increases the opportunity cost of other forms of spending the net effect on human capital is ambiguous using data from a natural experiment in uruguay we find that titling favours home investment to the detriment of some dimensions of human capital investment for children of 16 and under

energy efficiency of residential buildings in the european union an exploratory analysis of cross country consumption patterns abstract despite a common eu directive on energy efficiency in residential buildings levels of energy efficiency differ across european countries this article analyses these differences and investigates the effectiveness of different energy efficiency policies in place in those countries we firstly use panel data methods to explain average yearly energy consumption per dwelling and country by observable characteristics such as climatic conditions energy prices income and floor area we then use the unexplained variation by sorting between country differences as well as plotting within country changes over time to identify better performing countries these countries are analysed qualitatively in a second step we conduct expert interviews and examine the legal rules regarding building energy efficiency based on our exploratory analysis we draw a number of preliminary conclusions first we suggest that regulatory standards in conjunction with increased construction activity can be effective in the long run second the results suggest that carbon taxation represents an effective means for energy efficiency in this regard the scope of the carbon tax plays a crucial role we find evidence that a tax of 30 and a tax of 120 per ton of co2 cause markedly different reductions in energy consumption

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

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

is energy efficiency capitalized into home prices evidence from three u s cities abstract we test for evidence that energy efficiency features are capitalized into home prices in three u s metropolitan areas using hedonic regressions and multiple matching procedures we find that energy star certification is associated with higher sales prices in two of the markets the research triangle region of north carolina and portland oregon we find that local green certifications in portland and in austin texas are also associated with higher prices and that the estimated price impacts are larger than those from energy star matching on observables proves to be important in some cases reducing the estimated impacts compared with models without matching we calculate the implied energy savings from the estimated premiums and find that in the research triangle market the energy star premiums approximately equal the savings that program is designed to achieve but in portland the premiums are slightly greater than the program s savings due to low energy costs in the region

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

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

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

adverse selection and the middleman the question analyzed in this paper is whether a market that otherwise experiences an akerlofian lemons impasse can function if a middleman organizes trade it is found that the middleman s intervention can prove successful even if neither signals nor quality screening methods exist that could help him to assess the good s qualities the result is obtained under the hypothesis that the middleman randomizes his price offers to the sellers of the units to be intermediated copyright 1989 by the london school of economics and political science

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

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

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

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

exploring the diffusion of low energy houses an empirical study in the european union abstract diffusion of low energy houses is an important part of energy and climate policy in the european union eu and in individual eu countries key barriers to the adoption of low energy houses include additional construction costs and uncertainty surrounding actual energy and cost savings in this paper we econometrically analyze determinants of low energy house adoption including time and risk preferences we rely on original data from a large survey conducted among households in eight eu countries to our knowledge this is the first empirical study of low energy building adoption to rely on a demographically representative sample our set of covariates includes parameters of time and risk preferences that were elicited via state of the art incentivized multiple price list experiments and via self assessment scales we find mixed results for the effects of time discounting on low energy house adoption risk preferences do appear to matter as risk proneness increases so does the adoption of zero net or energy plus building but not passive houses consistent with the low cost hypothesis about environmental attitude and action we find no results for environmental attitudes and social norms

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

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

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

a new carbon tax in portugal a missed opportunity to achieve the triple dividend in 2014 the portuguese government appointed a commission for environmental tax reform that formulated a carbon tax proposal designed to achieve three dividends to help portugal meet the european union s target for emissions reductions by 2030 to boost long term employment and gdp above their pre carbon tax levels and to strengthen public finances by lowering public indebtedness a key feature of this proposal was a judicious set of mixed strategies to recycle all carbon tax revenues back into the economy in this note we show how the carbon tax that the portuguese parliament eventually approved deviated from such guidelines and ultimately failed to achieve the triple dividend we argue that authorities need to quickly amend the existing legislation to avoid this misguided attempt turning into a missed opportunity to improve environmental macroeconomic and fiscal outcomes

adverse selection private information and lowballing in insurance markets recent contributions to the adverse selection literature have focused on a multiperiod competitive environment in this setting a clean distinction arises between the predictions of competing models cooper and hayes extend the model of rothschild and stiglitz to multiple periods the result is a self selecting equilibrium characterized by price highballing or systematically overcharging new business kunreuther and pauly suggest that information asymmetries between competing insurance firms render such price quantity policies infeasible their model results in a pooling equilibrium that is characterized by price lowballing or systematically undercharging new business our evidence is consistent with the kunreuther and pauly model and reveals the persistence of adverse selection in the automobile insurance market copyright 1990 by the university of chicago

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

heterogeneous preferences and the individual change to alternative electricity contracts abstract based on data from a large scale computer based survey among more than 3700 citizens in germany this paper empirically disentangles the determinants of the general change of electricity contracts and the specific change from any green or non green to current green electricity contracts within the last ten years our econometric analysis reveals a strong relevance of behavioral factors and individual values and norms for example patience which was measured by an incentivized experiment included in the survey has a significantly positive effect on both general switches to alternative electricity contracts and specific switches to green electricity contracts furthermore trust and less robust social preferences also measured by an incentivized experiment have additional significantly positive effects on the specific change to green electricity contracts our estimation results also imply an important role of political identification i e an ecological policy orientation is strongly significantly positively correlated with the change to green electricity contracts furthermore several household specific factors like relocation decisions as well as socio demographic and socio economic variables like household income are also relevant the empirical analysis thus provides new explanation patterns for the phenomenon that relatively few households regularly change their electricity contracts and specifically switch to green electricity contracts although they have high stated preferences for such changes our insights suggest several directions for policy and electricity suppliers to increase these switching rates for example the high importance of trust for the change to green electricity contracts suggests transparency initiatives of electricity suppliers to decrease concerns against renewable energies

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

entitled to work urban property rights and labor supply in peru this brief summarizes the results of a gender impact evaluation study entitled entitled to work urban property rights and labor supply in peru new legal rights were issued in 1996 project teams providing titling service through 2003 in peru the study observed that between 1996 and 2003 the peruvian government issued property titles to over 1 2 million urban households the largest titling program targeted at urban squatters in the developing world this paper examines the labor market effects of increases in tenure security resulting from the program pre program squatters in program neighborhoods were significantly more likely to report improved tenure security by 60 percent similarly program participants were 18 8 percentage points less likely to report a high likelihood of eviction or invasion and 18 8 percentage points more likely to report that their dwelling was currently very secure from eviction or invasion the likelihood of working inside the home significantly falls by 11 6 percentage points for the average squatter family with two program periods

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

electricity prices and consumers long term technology choices evidence from heating investments abstract this paper studies consumers s sensitivity to energy costs at the moment of making a long term energy technology investment the analysis exploits local variation in regulated electricity distribution prices that are persistent over time and therefore a good measure of long term price expectations price impacts are estimated on extensive administrative registry data of private persons acting as home builders in finland during 2006 2011 the results show that electricity prices notably influence builders choices and that electricity tax increases have induced demand for technologies based on renewable energy the results on the comprehensive set of individual level characteristics reveal that technology choices vary systematically across households current dwelling status and the education level have the strongest influence on the choice probabilities price sensitivity is found to be lower for low income households and to vary by the current dwelling status and type of building location

property rights for the poor effects of land titling secure property rights are considered a key determinant of economic development the evaluation of the causal effects of property rights however is a difficult task as their allocation is typically endogenous to overcome this identification problem we exploit a natural experiment in the allocation of land titles in 1981 squatters occupied a piece of land in a poor suburban area of buenos aires in 1984 a law was passed expropriating the former owners land to entitle the occupants some original owners accepted the government compensation while others disputed the compensation payment in the slow argentine courts these different decisions by the former owners generated an exogenous allocation of property rights across squatters using data from two surveys performed in 2003 and 2007 we find that entitled families substantially increased housing investment reduced household size and enhanced the education of their children relative to the control group these effects however did not take place through improvements in access to credit our results suggest that land titling can be an important tool for poverty reduction albeit not through the shortcut of credit access but through the slow channel of increased physical and human capital investment which should help to reduce poverty in future generations

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

land tenure security and investment incentives puzzling evidence from burkina faso abstract the commonsense logic associating higher land security and higher incentives to invest has been recently called into question in the case of african agriculture to be meaningful empirical tests have to be carefully designed so as to take account of the possible endogeneity of the land rights variable this is done in this paper by applying suitable econometric methods to the original data collected in burkina faso the results obtained cast doubt on the existence of a systematic influence of land tenure security on investment by reviewing the justifications for scepticism in the recent literature we are able to conclude that the traditional village order where it exists provides the basic land rights required to stimulate small scale investment

individual time preferences and energy efficiency a large literature examines energy efficiency investments by consumers and firms partic ularly evaluation of the extent of and expla nations for an energy efficiency ee gap gerarden newell and stavins 2015 but prior studies have not considered the role of individ ual discount rates in such decisions instead most assessments assume a certain discount rate against which the rationality of observed choices is gauged allcott and wozny 2014 or alternatively estimate aggregate discount rates that best match observed ee decisions condi tional on an assumed decision model hausman 1979 the absence of evidence on the role of indi vidual discount rates is surprising because the profitability of ee investments depends fun damentally on the rate at which individuals discount future energy savings relative to the required upfront investment the potential importance of individual discount rates is further heightened by findings in experimental studies that elicited time preferences exhibit consider able heterogeneity frederick loewenstein and o donoghue 2002 this paper broadly examines the role of indi vidual discount rates in ee decisions our ear lier findings on information provision newell and siikamaki 2014 henceforth nsindicate that the efficacy of alternative labels in guiding cost efficient decisions depends critically on the discount rate used for analysis here we closely examine individual discount rates as a deter minant of the value households place on future energy savings our results demonstrate that individual dis count rates exhibit considerable heterogeneity

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

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

explaining electricity demand and the role of energy and investment literacy on end use efficiency of swiss households abstract this paper estimates the level of transient and persistent efficiency in the use of electricity in swiss households using the newly developed generalized true random effects model gtrem an unbalanced panel dataset of 1994 swiss households from 2010 to 2014 collected via a household survey is used to estimate an electricity demand frontier function we further investigate whether energy and investment literacy have an influence on the household electricity consumption the results show significant inefficiencies in the use of electricity among swiss households both transient 11 and persistent 22 we note that the high persistent inefficiency is indicative of structural problems faced by households and systematic behavioral shortcomings in residential electricity consumption these results indicate a considerable potential for electricity savings and thus reaching the reduction targets defined by the swiss federal council as part of the energy strategy 2050 wherein end use efficiency improvement is one of the main pillars the results support a positive role of energy and in particular investment literacy in reducing household electricity consumption policies targeting an improvement of these attributes could help to enhance efficiency in the use of energy within households

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

u s federal government subsidies for clean energy design choices and implications abstract subsidies for clean energy deployment have become a major component of u s federal energy and climate policy after a surge in spending under the american recovery and reinvestment act of 2009 they are an even larger component but now face increased scrutiny given their lasting presence how does one design these subsidies to be as cost effective as possible surprisingly the conceptual framework and empirical evidence available to help policymakers identify which subsidies generate the most bang for the buck are limited to help answer this question we begin with an overview of the justifications for and the arguments against subsidizing clean energy technologies next we briefly describe major subsidies finally we summarize key design choices suggesting an increased focus on upfront cash payments for physical outcomes such as capacity this contrasts with the considerable focus on tax credits loan guarantees production and cost based subsidies which have been more prominent to date

deconstructing the energy efficiency gap conceptual frameworks and evidence abstract energy efficient technologies offer considerable promise for reducing the financial costs and environmental damages associated with energy use but these technologies appear not to be adopted to the degree that appears justified even on a purely private basis we present two complementary frameworks for understanding this so called energy paradox or energy efficiency gap first we build upon previous literature by dividing potential explanations for the energy efficiency gap into three categories market failures behavioral anomalies and model and measurement errors second we examine the elements of cost minimizing energy efficiency decisions the typical benchmark used in assessing the gap s magnitude

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

property rights and investment in urban slums this paper examines the effect of changes in tenure security on residential investment in urban squatter neighborhoods to address the endogeneity of property rights i make use of variation in ownership status induced by a nationwide titling program in peru in a difference in difference analysis i compare the change in housing investment before and after the program among participating households to the change in investment among two samples of nonparticipants my results indicate that strengthening property rights in urban slums has a significant effect on residential investment the rate of housing renovation rises by more than two thirds of the baseline level the bulk of the increase is financed without the use of credit indicating that changes over time reflect an increase in investment incentives related to lower threat of eviction jel o12 o18 p25 p26

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

repeated insurance contracts and moral hazard abstract an attempt is made to account for the frequently observed phenomenon of insurance companies offering discounts to clients who possess a favorable record of past claims we argue that such discounts provide a mechanism which enables both insurer and insured to counteract the inefficiency which arises from moral hazard

the energy efficiency gap what does it mean abstract as renewed attention has been given by policy makers to energy conservation issues it has frequently been asserted that an energy efficiency gap exists between actual and optimal energy use the critical questions is how to define the optimal level of energy efficiency this paper seeks to disentangle some confusing strands of argument that are frequently brought to bear on this question by identifying the major conceptual issues that determine the set of feasible answers we identify five separate and distinct notions of optimality the economists economic potential the technologists economic potential hypothetical potential the narrow social optimum and the true social optimum each of these has associated with it a corresponding definition of the energy efficiency gap our analysis demonstrates that necessary preconditions for identifying the right measure of the energy efficiency gap include understanding and disentangling market failure and non market failure explanations for the gradual diffusion of energy efficient technologies

prospect theory and energy efficiency abstract investments in energy efficiency entail uncertainty and when faced with uncertainty consumers have been shown to behave according to prospect theory preferences are reference dependent and exhibit loss aversion and probabilities are subjectively weighted using data from a choice experiment eliciting prospect theory parameters i provide evidence that loss averse people are less likely to invest in energy efficiency then i consider policy design under prospect theory when there are also externalities from energy use a higher degree of loss aversion implies a higher subsidy to energy efficiency numerical simulations suggest that the impact of prospect theory on policy may be substantial

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

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

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

decision making governance for purchases of solar photovoltaic systems in japan in this study we analyze the factors that affecting purchasing decision time for solar photovoltaic pv s in japan based on our survey consumers spend about 4 months to make purchase decision also our estimation results show that information and knowledge that consumers obtained from the neighborhood and elsewhere make consumers more careful in their decision making and extend the purchase decision on the other hand experts on the advantages and disadvantages of installation shortened the decision time the situation and environment of each household in terms of income family size and the way of purchase of new homes have influenced on the decision to purchase a pv system in addition the availability of feed in tariffs was highly correlated with purchasing motivation but unexpectedly the capital subsidy programs have either little impacts or even delayed impacts on the purchasing timing

explaining the energy efficiency gap expected utility theory versus cumulative prospect theory abstract energy efficiency is one of the key factors in mitigating the impact of climate change and preserving non renewable resources although environmental and economic justifications for energy efficiency investments are compelling there is a gap between the observable and some notion of optimized energy consumption the so called energy efficiency gap behavioral biases in individual decision making have been resonated by environmental research to explain this gap to analyze the influence of behavioral biases on decisions upon energy efficiency investments quantitatively we compare expected utility theory with cumulative prospect theory on basis of a real world example we illustrate how the extent of the gap is influenced by behavioral biases such as loss aversion probability weighting and framing our findings indicate that cumulative prospect theory offers possible explanations for many barriers discussed in literature for example the size of the gap rises with increased risk and investment costs because behavioral biases are systematic and pervasive our insights constitute a valuable quantitative basis for environmental policy measures such as customer focused and quantitatively backed public awareness campaigns financial incentives or energy savings insurances in this vein this paper may contribute to an accelerated adaption of energy efficiency measures by the broader public

tenure security and urban squatting while recent studies have shown that up to 35 of the total urban population of the third world live in squatter settlements there is a dearth of economic analysis on the phenomenon of squatting this paper attempts to fill this gap the equilibrium model argues that the difference in unit housing prices between the non squatting formal sector of a city and its squatting informal sector reflects the premium associated with a secure tenure status the empirical portion of this paper uses hedonic price techniques to derive the average premium on tenure security in a medium sized philippine city davao results show that formal sector unit dwelling prices are about 18 renters to 58 owners more than in the informal sector these equilibrium price differentials were found to be greater for lower income groups larger household sizes and households with older heads for renters and younger heads for