Working Papers
Residential energy use and conservation: Economics and demographics
Working Paper (March 2012)
Energy consumption in the residential sector offers an important opportunity for
conserving resources. However, much of the current debate regarding energy efficiency
in the housing market focuses on the physical and technical determinants of energy
consumption, neglecting the role of the economic behavior of resident households. In
this paper, we analyze the extent to which the use of gas and electricity is determined
by the technical specifications of the dwelling as compared to the demographic
characteristics of the residents. Our analysis is based on a sample of more than
300,000 Dutch homes and their occupants. The results indicate that residential gas
consumption is determined principally by structural dwelling characteristics, such
as the vintage, building type, and characteristics of the dwelling, while electricity
consumption varies more directly with household composition, in particular income
and family composition. Combining these results with projections on future economic
and demographic trends, we find that, even absent price increases for residential
energy, the aging of the population and their increasing wealth will roughly offset
improvements in the energy efficiency of the building stock resulting from policy
interventions and natural revitalization
Consumer-Friendly and Environmentally-Sound Electricity Rates for the Twenty-First Century
Working Paper (March 2012)
This paper emphasizes the importance of bringing off-peak rates down to their
marginal costs so that the current mispricing of electricity does not act as a substantial
deterrent to the reduction of greenhouse gases, as through vehicle electrification. It
considers whether there are feasible, efficient and equitable time-varying electricity rate
structures that will be attractive to large numbers of residential customers with smart
meters. One family of rate structures called Household On and Off Peak (HOOP) plans meets
the efficiency criterion and is promising for meeting the distributional ones. HOOP plans
utilize marginal-cost time-based rates except for fixed infrastructure charges that vary by
customer group and cover nonmarginal expenses. Two alternative equity principles to guide
the assignment of the fixed infrastructure charges to different groups are considered. A
representative sample of California residences with usage data for each 15 minute interval
for a one year period enablessome preliminary tests ofthese HOOP designs. Simple
statewide versions of these designs replicate reasonably closely the actual bill distribution
that results from the independent and far more complex rate structures in use by the three
separate utilities that service these residences, suggesting that each utility could use HOOP
designs to meet the necessary criteria.
The Diffusion of Energy Efficiency in Building
Working Paper: GSPP11-102 (February 2012)
Awareness of global warming and the extent of greenhouse gas emissions have focused more attention upon energy efficiency in building. Moreover, the inventory of “green” office space in the United States has increased dramatically since the introduction of rating schemes that attest to the energy efficiency or sustainability of commercial buildings. In some metropolitan areas, the supply of certified office buildings has more than doubled in the last decade, and there are a few metropolitan areas where “green” office space now accounts for more than a quarter of the total office stock. In this paper, we analyze the diffusion of buildings certified for energy efficiency across US property markets. Using a panel of 48 metropolitan areas observed over the last fifteen years, we trace the diffusion of green building practices across the country.
We then model the geographic patterns and dynamics of building certification, relating industry composition, changes in economic conditions, characteristics of the local commercial property market, and the presence of human capital, to the cross-sectional variation in energy-efficient building technologies and the diffusion of those technologies over time. Understanding the determinants and the rate at which energy-efficient building practices diffuse over space and time is important for designing policies to affect resource consumption in the built environment.
Social Networks and the Decision to Insure: Evidence from Randomized Experiments in China
Working Paper (January 2012)
Using data from a two-year randomized experiment in rural China, this paper studies the influence of social networks on the decision to adopt a new weather insurance product and the mechanisms through which social networks operate. In the first year, I provided financial education to
a random subset of farmers and found a large social network effect on insurance take-up: for untreated farmers, having an additional friend receiving financial education raises take-up by almost half as much as obtaining financial education directly, a spillover effect equivalent to offering a 12% reduction in the average insurance premium. By varying the information available to subjects about their peers’ take-up decisions and using randomized default options, I show that the positive social network effect is not driven by scale effects, imitation, or informal risk-sharing, but instead by the diffusion of insurance knowledge. One year later, social networks continue to affect insurance demand: observing an above-median share of friends receiving payouts increases insurance take-up at a rate equivalent to about 50% of the impact of receiving payouts directly. I also find that social network effects are larger in villages where households are more strongly connected, and when the people who receive financial education first are more central in the social network.
The Spatial Consequences of Autarky in Land-Use Regulation: Strategic Interaction or Simply Paralell
Working Paper: GSPP08-102 (January 2012)
The Future of the Government Sponsored Enterprises: The Role for Government in the U.S
Working Paper: 17685 (December 2011)
This paper analyzes options for reforming the U.S. housing finance system in view of the failure of
Fannie Mae and Freddie Mac as government sponsored enterprises (GSEs). The options considered
include GSE reform, a range of possible new governmental mortgage guarantee plans, and greater
reliance on private mortgage markets. The analysis also considers the likely consequences of adopting
alternative roles for government in the U.S. housing and mortgage markets. We start by reviewing
the history of the GSEs and their contributions to the operation of U.S. housing and mortgage markets,
including the actions that led to their failure in conjunction with the recent mortgage market crisis.
The reform options we consider include those proposed in a 2011 U.S. Treasury White Paper, plans
for new government mortgage guarantees from various researchers and organizations, and the evidence
from Western European countries for the efficacy of private mortgages markets.
Hydropower in the CDM: Examining Additionality and Criteria for Sustainability
Working Paper: ERG-11-001 (November 2011)
Labor Standards and Human Rights: Implications for International Trade and Investment
Working Paper: GSPP12-001 (August 2011)
The establishment of international labor standards linked to market access within the WTO is among the proposals intended to remedy the gross violations of labor and human rights that accompany international trade and investment. Yet, the WTO Charter and, previously, the GATT are virtually silent on the potential inhumanity of globally integrated goods and services markets. Despite intense pressure from the United States and the European Union, the Singapore Ministerial Declaration (December 1996), while acknowledging the importance of international labor standards, identified the International Labor Organization (ILO) as the competent body to establish and monitor labor standards. However, advocates for international labor standards ultimately gained access to the process of rules-setting in the WTO indirectly through Article XXIV governing the creation of customs unions and free trade agreements and, more importantly, the 1971 GSP Decision permitting special and differential treatment of developing country exports.
Thus, contrary to the WTO Ministerial dictates, labor standards are now routinely enforced by the prospective loss of preferential tariff concessions and market access. We discuss in this context a mechanism for linking ILO-established labor standards, monitoring by the ILO, and enforcement through the threat of lost trade concessions that emerged fully operational in the 1999 U.S.-Cambodia Bilateral Textile Trade Agreement. Under this agreement, the United States provided Cambodia access to US markets by giving expanded apparel and textile quotas conditional on improved working conditions in the garment sector.
We also discuss the labor and human-rights issues that emerge in a globalizing world economy, the market failures that produce labor and human-rights violations, and the role of labor standards in mitigating the most grievous of consequences. We then discuss the evidence on the impact that labor standards have on trade, firm behavior and investment, and on workers, and whether or not there is a race to the bottom, which we conclude not to be the case.