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This paper estimates flexible demand systems for heterogeneous households in the United States and links the estimated parameters with an economy-wide model to assess their relative contributions to the social cost of regulation. We estimate elasticities for several final demand categories as well as labor-leisure elasticities that are important for calibrating the labor-leisure choice in the economy-wide model and find that estimated elasticities are relatively similar across regions but vary meaningfully by income. Using the estimated elasticities, we explore the implications of both the functional form and its parameterization in a simplified computable general equilibrium model for the social and distributional costs of illustrative policy scenarios. Model variants with less flexible consumer demand systems overestimate social costs across our entire range of scenarios. Furthermore, we find that parameterizing the model with elasticities that vary with household income is important for adequately characterizing the distributional implications of a policy. [ABSTRACT FROM AUTHOR]

Using quarterly temperature and employment data between 1990 and 2021, this paper uncovers nuanced evidence on the impact of seasonal temperature within US counties: higher winter temperature increases private sector employment growth while higher summer temperature decreases it. The impacts of higher temperature in milder seasons, fall and spring, are statistically insignificant. Moreover, the negative impact of higher summer temperature persists while the positive impact of higher temperature in the winter is more short-lived. The negative effects of a hotter summer are pervasive and persistent in many sectors: most significantly in "Construction" and "Leisure and Hospitality" but also in "Trade, Transport, and Utilities" and "Financial Activities". In contrast, the positive effects of a warmer winter are less pervasive. The employment effect of a hotter summer has been more severe in recent decades. [ABSTRACT FROM AUTHOR]

This paper examines the effect of the U.S. Environmental Protection Agency's Cluster Rule on the product-mix decisions of plants in the pulp, paper, and paperboard industries. The Cluster Rule combines regulatory requirements from the Clean Air Act and Clean Water Act that are based on plants altering their production processes away from chlorine-based bleaching agents. In addition to, or instead of, altering production processes, plants may plausibly comply with the regulation by reducing output of bleached products or dropping some of these products entirely. Using a difference-in-difference-in-differences approach, we find evidence that plants facing both air and water Cluster Rule regulation (treatment group) are more likely to drop bleached products relative to unbleached products compared to plants facing only air Cluster Rule regulation (control group). Furthermore, we find evidence that plants in the control group alter their product mixes toward bleached products. [ABSTRACT FROM AUTHOR]

Abstract: This paper estimates the effects of humidity and temperature on mortality rates in the United States (c. 1973–2002) in order to provide an insight into the potential health impacts of climate change. I find that humidity, like temperature, is an important determinant of mortality. Coupled with Hadley CM3 climate-change predictions, I project that mortality rates are likely to change little on the aggregate for the United States. However, distributional impacts matter: mortality rates are likely to decline in cold and dry areas, but increase in hot and humid areas. Further, accounting for humidity has important implications for evaluating these distributional effects. [Copyright &y& Elsevier]

This paper examines the effect of air pollution on labor supply in Lima, Peru. We focus on fine particulate matter ( PM 2.5 ), an important pollutant for health according to the medical literature, and show that moderate levels of pollution reduce hours worked for working adults. Our research design takes advantage of rich household panel data in labor outcomes to address omitted variables. This research design allows us to investigate whether the response to air pollution is non-linear. We find that the effect of moderate pollution levels on hours worked is concentrated among households with susceptible dependents, i.e., small children and elderly adults; while the highest concentrations affect all households. This suggests that caregiving is likely a mechanism linking air pollution to labor supply at moderate levels. We provide further evidence of this mechanism using data on children morbidity. Finally, we find no evidence of intra-household attenuation behavior. For instance, there is no re-allocation of labor across household members, and earnings decrease with air pollution. [ABSTRACT FROM AUTHOR]

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. [Copyright &y& Elsevier]

Abstract: This paper analyzes the drivers of wind power development in the United States, focusing on government renewable energy incentives and access to the electricity grid. The effects of wind capacity, electricity transmission line coverage and grid regulation, as well as state and federal subsidies from 1998 to 2007 are estimated via random effects Tobit, Probit, and ordinary least squares instrumental variables regression. The results indicate that the federal production tax credit, state-level sales tax credit and production incentives play an important role in promoting wind power. In addition, higher wind power penetration levels can be achieved by bringing more parts of the electricity transmission grid under independent system operator regulation. This paper concludes that state and federal government policies play a significant role in wind power development both by providing financial support and by improving physical and procedural access to the electricity grid. [Copyright &y& Elsevier]

Over the past decade the production of tight oil and shale gas significantly increased in the United States. This paper examines how this energy boom has affected regional crime rates throughout the country. We find positive effects on rates of various property and violent crimes in shale-rich counties. In 2013, the cost of the additional crimes in the average treatment county was roughly $2 million. These results are not easily explained by shifts in observed demographics like gender and age. There is however evidence that people with criminal records (registered sex offenders) moved disproportionally to shale-boom towns in North Dakota. We also document a rise in income inequality (a postulated determinant of criminal activity) that coincides with the timing of the energy boom. Policy makers in boom towns should anticipate these crime effects and invest in public infrastructure accordingly. [ABSTRACT FROM AUTHOR]

Abstract: This paper estimates the impact of climate change on the prevalence of criminal activity in the United States. The analysis is based on a 30-year panel of monthly crime and weather data for 2997 US counties. I identify the effect of weather on monthly crime by using a semi-parametric bin estimator and controlling for state-by-month and county-by-year fixed effects. The results show that temperature has a strong positive effect on criminal behavior, with little evidence of lagged impacts. Between 2010 and 2099, climate change will cause an additional 22,000 murders, 180,000 cases of rape, 1.2 million aggravated assaults, 2.3 million simple assaults, 260,000 robberies, 1.3 million burglaries, 2.2 million cases of larceny, and 580,000 cases of vehicle theft in the United States. [Copyright &y& Elsevier]

Abstract: Using the oil price increase of 1979 as a natural experiment and several event study specifications, this paper finds evidence that the oil spike induced significant decreases in carbon emissions on both the intensive (miles driven) and extensive (auto fuel efficiency) margins. Further, it appears that substitution on the intensive margin occurred instantaneously whereas extensive margin substitution occurred with a significant lag. Given the timing of the changes, the results appear robust to the implementation of Corporate Average Fuel Economy (CAFE) standards over the same time period. These findings have important implications for estimating demand elasticities for durable goods with respect to energy prices and the price elasticity of fuels themselves. [Copyright &y& Elsevier]

Abstract: This paper examines the unexplored link between the prevalence of overweight and obesity and vehicle demand in the United States. Exploring annual sales data of new passenger vehicles at the model level in 48 U.S. counties from 1999 to 2005, we find that new vehicles demanded by consumers are less fuel-efficient on average as a larger share of people become overweight or obese. The OLS results show that a 10 percentage point increase in obesity and overweight reduces the average MPG of new vehicles demanded by 1.4 percent, an effect requiring a 12 cent increase in gasoline prices to counteract. The 2SLS results after controlling for possible endogeneity in overweight and obesity prevalence put those two numbers at 5 percent and 54 cent, respectively. These findings, robust to a variety of specifications, suggest that policies to reduce overweight and obesity can have additional benefits for energy security and the environment. [ABSTRACT FROM AUTHOR]

Abstract: This paper examines the implications of alternative allowance allocation designs for industry profits and GDP under a federal cap-and-trade program to reduce greenhouse gas emissions. We employ a general equilibrium model of the U.S. economy with a unique treatment of capital dynamics that permits close attention to profit impacts. Effects on profits depend critically on the relative reliance on auctioning or free allocation of allowances. Freely allocating fewer than 15% of the emissions allowances generally suffices to prevent profit losses in the most vulnerable U.S. industries. Freely allocating all of the allowances substantially overcompensates these industries. When emissions allowances are auctioned and the proceeds employed to finance cuts in income tax rates, GDP costs are about 33% lower than when all allowances are freely allocated. Our results are robust to policies differing in stringency, the availability of offsets, and the opportunities for intertermporal trading of allowances. [ABSTRACT FROM AUTHOR]

Abstract: By estimating a simultaneous panel data model of environmental innovation and toxic air pollution, this paper identifies bi-directional causal links between the two. We study a panel of 127 manufacturing industries over the period 1989–2004. Pollutant emissions are an implicit measure of policy stringency and environmental patent counts are used to measure environmental innovation. After accounting for the joint endogeneity, we find that environmental innovation is an important driver of reductions in US toxic emissions. Conversely, we find that tightened pollution targets induce environmental innovation. However, our estimates indicate that the “environmental policy multiplier” – the proportionate contribution of induced innovation to long-run emission reduction – is small. [Copyright &y& Elsevier]

We study the impact of voluntary prices on the demand for plastic bags, using two years of administrative data from a national supermarket chain in Uruguay. We find that prices of US$ 0.07 and US$ 0.10 per unit decreased the number of bags used by its customers in the range of 70%–85%. We also find that in anticipation of the price, customers increased the use of bags by up to 38% in some branches before its implementation. This result has strong implications for future studies, regarding the need to use long pre-periods. According to our data, short pre periods could bias upward the estimation of the effect of the prices by up to 41%. Finally, we do not find evidence consistent with the supermarket suffering a loss of sales, due to clients moving to stores not pricing the bags. The fact that the supermarket is a discount chain (clients are more price sensitive) and that it seems to have chosen the cities and towns in which it had more market share to rollout the prices, may inform policy makers about the conditions under which incomplete and moderate incentives may work. [ABSTRACT FROM AUTHOR]

The staggered and partial restructuring of state electricity markets beginning in 1996 is leveraged to identify the effect of entry deregulation on investment in generation capacity during the U.S. Gas Boom. Using synthetic control to construct the counterfactual outcome, this paper finds restructuring led to a 17 percent increase in capacity beyond the counterfactual in the seven years following restructuring. The overinvestment of the electricity industry is consistent with market coordination failure, contagion and low real interest rates, leading to an environmental welfare gain of $27.6 billion but overall net welfare loss of $18.85 billion. [ABSTRACT FROM AUTHOR]

Flood-related events are the most damaging natural hazard in the United States, yet many households at risk do not have flood insurance. Using detailed policy- and claims-level data from the National Flood Insurance Program (NFIP), we conduct a holistic analysis of the market for publicly provided flood insurance in the U.S., focusing on not only high-risk areas subject to an incomplete mandate requiring the purchase of insurance, but also lower risk areas where no such mandate exists. We are able to better understand determinants of demand for insurance in a setting with voluntary purchase and low take-up and therefore provide a more complete analysis of the market for flood insurance in the U.S. than previous work. In addition to exploring correlates of demand for flood insurance, this paper provides quasi-experimental estimates of households' willingness-to-pay for flood insurance and finds strong evidence to suggest the NFIP failing to utilize full information on flood risk leads to adverse selection in the program. [ABSTRACT FROM AUTHOR]

Abstract: Using cross-sectional data, this paper estimates a national energy model of fuel choice by both households and firms. Consumers in warmer locations rely relatively more heavily on electricity rather than natural gas, oil, and other fuels. They also use more energy. Climate change will likely increase electricity consumption on cooling but reduce the use of other fuels for heating. On net, American energy expenditures will likely increase, resulting in welfare damages that increase as temperatures rise. For example, if the US warms by 5°C by 2100, we predict annual welfare losses of $57 billion. [Copyright &y& Elsevier]

Abstract: Using patent data from the United States, Japan, and Germany, this paper examines both innovation and diffusion of air pollution control equipment. Whereas the United States was an early adopter of stringent sulfur dioxide (SO2) standards, both Japan and Germany introduced stringent nitrogen dioxide (NO X ) standards much earlier than the US. Nonetheless, in both cases, tightened standards in the US led to more domestic patenting, but not more foreign patenting. Overall, the data suggest that inventors respond to environmental regulatory pressure in their own country, but not to foreign environmental regulations. Moreover, any technology transfer that occurs appears to be indirect. Domestic innovation occurs even for technologies that have already experienced significant innovative activity abroad and utilities purchase pollution abatement equipment from domestic firms. However, patent citation data from the US do show that earlier foreign patents are an important building block for NO X pollution control innovations in the US. [Copyright &y& Elsevier]

Abstract: This paper uses one of the strongest hurricanes to hit the US, Andrew in 1992, to define a quasi-random experiment that permits estimation of the responses of housing values to information about new hurricanes. Lee County, Florida did not experience damage from Andrew. The storm was a “near-miss.” We hypothesize that Andrew conveyed risk information to homeowners in the county. A difference-in-differences (DND) framework identifies the effect of this information on property values in areas likely to experience significant storm damage. The DND findings indicate at least a 19 percent decline in property values. [Copyright &y& Elsevier]

To explore the distinction between state dependence and heterogeneity in repeated decisions, this paper combines a Mixed Logit model with a state dependence parameterization from the marketing literature to study fishing location choices of commercial sea urchin divers in California. It examines implications of ignoring either effect and finds in all cases that true state dependence is an important determinant of location choice. Consequently, spatial policies like marine reserves can lead to differences in the short- and long-run behavioral responses of the fishing fleet. Under some specifications, random preference parameters are statistically significant when state dependence is excluded from the model, but when it is included, random preference parameters are not significant. In other specifications, including state dependence only dampens the variability in preference parameters. These results highlight the importance of gathering and analyzing diary-type data for commercial fisheries as well as for similar choice problems in recreation demand. [ABSTRACT FROM AUTHOR]

Most US federal environmental policies allow states to assume responsibility for implementation and enforcement of regulations; states with this responsibility are referred to as "authorized" or having "primacy." Although such decentralization may have benefits, it may also have costs when pollution crosses state borders. This paper estimates these costs empirically by studying the free riding of states authorized under the Clean Water Act. The analysis examines water quality in rivers around the US and includes fixed effects for the location where water quality is monitored to address unobserved geographic heterogeneity. The estimated equations suggest that free riding gives rise to a 4% degradation of water quality downstream of authorized states, with an environmental cost downstream of $17 million annually. [ABSTRACT FROM AUTHOR]

This paper introduces endogenous technological change in a Hotelling-Herfindahl model of natural resource use to study the recent developments in the U.S. natural gas industry. We consider optimal forward-looking technology investments, and study implications for the order of extraction of conventional and shale gas, and a backstop technology, and characterize the development of gas prices. We find that technology investments increase during the extraction of conventional gas. Once production shifts towards shale gas, investments decline. Consistent with current trends, our theory explains how gas prices can follow a U-shaped path. The calibrated model suggests that U.S. shale gas production continues to grow and prices continue to decrease until 2050. We analytically and numerically show that the introduction of a carbon tax would reduce technology investments, and thus could drastically change the temporal patterns of U.S. shale gas extraction. The forward-looking behaviour of firms is crucial for such an effect, which does not occur in models that treat the improvement in extraction technology as an unanticipated shock to the industry. [ABSTRACT FROM AUTHOR]