Many electric utilities in the United States have replaced flat pricing schedules with increasing block prices (IBPs) to decrease aggregate electricity use without imposing costs on low-income households. Under IBPs, the price per kilowatt-hour increases as electricity use increases. It is not clear, however, whether IBPs decrease aggregate energy use and protect low-income households. I use monthly billing records and demographic data to estimate price elasticities of energy demand by income. I use these elasticities to show that IBPs increase total electricity use relative to a revenue-neutral flat price. Finally, I find that IBPs decrease electricity bills for low-income households.
Work in Progress
Does Energy Star Certification Decrease Energy Use in Commercial Buildings?
A number of policies and programs are aimed at reducing energy use in buildings---building energy codes, disclosure laws, energy-use benchmarking, and mandated or subsidized energy audits. In the United States, many of these initiatives are enacted at the state or local level. At the federal level, one of the main programs is Energy Star certification, which provides a label to top energy performing buildings. In this paper, we evaluate changes in rents and utility expenditures following Energy Star certification using a national sample of over 4,400 office buildings combined with Energy Star data from the U.S. EPA. We find that building rents increase by 3.7 percent following certification, but that utility expenditures remain unchanged. We provide novel evidence that buildings do not make upgrades or capital investments to obtain a certification, suggesting that the Energy Star program primarily certifies buildings that are already energy efficient
Bunching in Residential Electricity Consumption
Becka Brolinson, Laura Grant
In this paper, we estimate whether households bunch in response to a feebate pricing schedule for electricity consumption. Households receive a monthly allocation of electricity. If the household uses less than their allocation, they receive a rebate; if they use more, they have to pay. In addition, electricity is free in a "buffer" region around the allocation. This buffer zone creates two kinks in each household's budget constraint: one where prices switch from positive to zero, and a second where prices switch back from zero to positive. We empirically estimate the excess mass of households at the second kink using a unique pricing experiment where all electricity became free in March 2019. This unexpected change in electricity prices allows us to observe the counterfactual distribution of electricity use in the absence of any kinks in the budget constraint. There are 10.67 percent more households in the bunching region of the distribution than we would expect if there were no kink in the budget constraint. Thus, the feebate pricing policy with a free buffer zone increases household electricity consumption relative to a feebate pricing schedule without any buffer zone.
Valuing Public Transit: The L-Train Slowdown in Brooklyn
Americans travel 60 billion miles on public transit each year, at a cost to taxpayers of $40 billion. Are the benefits worth the costs? This paper quantifies the value of public transit using the surprise, hurricane-related announcement of the temporary shutdown of an important piece of transportation infrastructure: the L-train connecting Brooklyn and Manhattan. My approach allows me to measure changes in housing sales prices by using a change in public transit infrastructure that is (a) temporary and (b) not an outcome of city transit planning, but rather an unexpected consequence of a natural disaster. I find that the L-train's shutdown announcement caused a decrease in sales prices for affected housing units of 11.3 percent. This estimate suggests a monthly value of public transit access of around $1,800, demonstrating that households in Brooklyn ascribe a high value to transit access.
AERE Summer Conference: Schedule
Young Economists Symposium (YES): Schedule
University of Maryland DC Area Student/Professor Environmental and Energy Economics Workshop: Schedule
Heartland Environmental and Resource Economics Workshop at Illinois: Schedule