This is a collection of working papers written or co-written by members of the S&S Graduate Fellows Program, and they reflect the wide range of research interests represented in the program. We publish them here with the interest of advancing the literature in the relevant fields. As working papers, these have not been officially peer reviewed, but they have been reviewed by the S&S editorial team and, often, many seminar participants.
We hope that these papers help your research and provide a deeper understanding of the topics we cover on S&S. Please email [email protected]
Abstract:I estimate the water savings and property value effects of a Las Vegas area water conservation program that subsidizes conversions of lawn to desert landscape. Using event studies and panel fixed-effects models, I find that the average conversion reduces baseline water consumption by 21 percent and increases property values by about 1 percent. In addition, my results show that water savings remain relatively stable over time; that water savings are inversely proportional to annual program take-up; that participants with high pre-conversion water demand save more water than participants with lower pre-conversion water demand; and that a 6 percent price increase would have achieved equivalent savings. I find little evidence of property value spillovers to neighboring properties. The program saves water at an annual rate of $4.84/kgal and if I include an estimate of the scarcity value of water, generates net benefits of $2.00 per square foot of desert landscape converted.
Abstract: How effectively will economic agents adapt to climate change? This study assesses the scope for long-run adaptation to future warming by comparing the economic impacts of acute heat shocks across varying climatic regions within the United States. Using a panel of county-level payroll and daily temperature data (1986-2012), I estimate the causal impact of hot days on local labor product, controlling for county, year and state-by-year fixed effects. For the average U.S. county, an additional day above 90°F results in a -0.048% decline in payroll per capita that year, consistent with previous studies (e.g. Hsiang and Deryugina, 2014). To measure adaptation, I assess effect heterogeneity across climate regions, and find that places more prone to extreme heat stress (e.g. Houston) exhibit significantly lower temperature sensitivities than colder ones (e.g. Boston), possibly due to higher levels of adaptive capital. A year with 10 additional 90°F days reduces output per capita by -2.63% in counties in the coldest quintile; -0.46%, or roughly one fifth that, in the warmest quintile, suggesting significant scope for long-run adaptation to climate change. However, the fact that even the hottest, well adapted regions of the United States suffer economically meaningful production impacts from extreme heat suggests that climate adaptation will likely entail non-trivial costs.
Abstract: Existing estimates of energy tax incidence assume that the pass-through of taxes to final consumer prices is uniform across the affected population. I show that, in fact, variation in local market conditions drives significant heterogeneity in pass-through, and ignoring this can lead to mistaken conclusions about the distributional impacts of energy taxes. I use data from the Spanish retail automotive fuel market to estimate station-specific pass-through, focusing on the effects of competition and wealth. A novel informational mandate provides access to a national, station-daily panel of retail diesel prices and characteristics and allows me to investigate market composition at a fine level. Event study and difference-in-differences regression reveal that, while retail prices rise nearly one-for-one (100%) with taxes on average, station-specific pass-through rates range from at least 70% to 120%. Greater market power – measured by brand concentration and spatial isolation – is strongly associated with higher pass-through, even after conditioning on detailed demand-side characteristics. Furthermore, pass-through rises monotonically in area-average house prices. While a conventional estimate of the Spanish diesel tax burden suggests roughly equivalent incidence across the wealth distribution, overlaying the effect of heterogeneous pass-through reveals the tax to be unambiguously progressive.