Do energy prices influence investment in energy efficiency? Evidence from energy star appliances

I examine whether electricity prices influence the likelihood that consumers purchase high efficiency appliances by using state-year panel data on electricity prices and the proportion of sales of new appliances that involve high efficiency “Energy Star” models. I find no evidence that electricity prices affect the propensity for consumers to choose high efficiency appliances. Point estimates are extremely small and precisely estimated. The findings suggest that price-based energy policies may be limited in the extent to which they increase investment in residential energy efficiency, which has been considered one of the lowest cost opportunities for reducing carbon emissions.     

Do microsporidian parasites affect courtship in two-spotted gobies?

Courtship and body condition of male two-spotted gobies (Gobiusculus flavescens) harbouring naturally acquired microsporidian infections were compared with those of microsporidian-free males under standardized conditions in the lab. Although parasite infection had no apparent effect on individual condition, it significantly affected male courtship intensity. This effect, however, was affected by the intensity of the female courtship. Our study is one of the first to demonstrate a sub-lethal behavioural effect of a microsporidian parasite that could negatively affect the reproductive success of infected individuals. Our results also suggest that secondary sexual traits like courtship may be more sensitive to moderately detrimental effects of parasite infection than classical condition indices.     

Do changes in risk-taking affect habitat shifts of sticklebacks?

The distribution of individuals is often the outcome of conflicting demands, such as between predator avoidance and reproduction. A factor that has seldom been considered in studies on habitat choice is time-dependent changes in risk-taking. We investigated the distribution of threespine sticklebacks, Gasterosteus aculeatus, over two breeding seasons and found it to change with time towards shallower areas with a more open habitat structure. Shallow and structurally less complex habitats were probably favorable due to a higher reproductive rate, but costly due to an increased risk of predation. Contrary to expectation, changing predation pressure was not a predictor of the shift in habitat use and, thus, not the proximate cue. Instead date was the main predictor. This suggests that increased risk-taking in relation to predation contributed to the habitat shift. The possibility was supported by a laboratory experiment that showed sticklebacks to take larger risks and prefer more predator-exposed areas at the end of the season than at the start of the season. These results demonstrate that temporal changes in risk-taking occur and can influence habitat choice, which points to the importance of considering risk-taking, in addition to predation pressure, when studying the effect of predators on distribution.Communicated by J. Krause     

Do credit constraints favor dirty production? Theory and plant-level evidence

This paper explores the effect of credit constraints on production-generated pollution emissions. I develop a theoretical model wherein polluting firms borrow externally to finance investment in various assets, subject to a credit constraint. The main insight of the model is that credit constraints distort the composition of assets towards over-investment in tangible assets, which can be pledged as collateral, thereby increasing the intensity of emissions. The predictions of the model are tested using a unique dataset consisting of plant-level measures of pollution emissions and creditworthiness. The empirical results indicate that credit constraints significantly increase pollution emissions (even after accounting for the scale effect), and the results withstand multiple robustness checks. Moreover, the effect of credit constraints is particularly acute in industries with greater reliance on external credit. Finally, I demonstrate that firm-level credit constraints distort the composition of assets and that the composition of assets influences pollution emissions.     

Is energy efficiency capitalized into home prices? Evidence from three U.S. cities

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.     

Do energy efficiency standards hurt consumers? Evidence from household appliance sales

We build novel welfare-based price indices for major household appliances that leverage changes in same-model prices and how consumers substitute between exiting, continuing and new models. We then evaluate how minimum energy efficiency requirements and changing criteria for Energy Star™ labels affected these indices in the U.S. between 2001 and 2011, a period of time when some appliances experienced standard changes while others did not. We find that prices declined while quality and consumer welfare increased, especially when standards become more stringent. We also find that much of the price index decline can be attributed to standards-induced innovation, or cannibalism, not to inter-manufacturer competition. Our results also add to a growing body of evidence that the Consumer Price Index exaggerates inflation due to inadequate account of quality and substitution to new goods.     

Do water saving technologies save water? Empirical evidence from North China

This paper describes the extent of water saving technologies usage and evaluates their impacts on water use, water productivity, total irrigated sown area and crop mix in North China. A set of panel data collected at the househol.d and plot levels is used in empirical analysis. Water saving technologies are categorized into traditional technologies, household-based technologies and community-based technologies. By 2007, traditional technologies and household-based technologies are used in almost all sample villages. However, the shares of sown area on which water saving technologies are used are still fairly low. Econometric analysis using plot level fixed effects show that using water saving technologies can reduce crop water use and improve the productivity of water. The positive effects are generated mainly through the use of household-based or community-based technologies. The use of water saving technologies does not have statistically significant impacts on total irrigated sown area and crop mix.     

Do renewable energy policies reduce carbon emissions? On caps and inter-industry leakage

In a parsimonious two-sector general equilibrium model, we challenge the widely-held tenet that within a cap-and-trade system renewable energy policies have no effect on carbon emissions. If the cap does not capture all sectors, we demonstrate that variations of a renewable energy subsidy change aggregate carbon emissions through an inter-industry leakage effect. We decompose this effect into intuitively intelligible components that depend in natural ways on measurable elasticity parameters. Raising the subsidy always reduces emissions if funded by a lump-sum tax, reinforcing recent findings that tightening environmental regulation can cause negative leakage. However, if the subsidy is funded by a levy on electricity, it can increase emissions. These results provide a valuable basis for an informed design of renewable energy policies and an accurate assessment of their effectiveness. We highlight how a state-of-the-art statistic used by governments to gauge such effectiveness, “virtual emission reductions”, is biased, because inter-industrial leakage effects are not captured.     

Do EPA regulations affect labor demand? Evidence from the pulp and paper industry

Any opinions and conclusions expressed herein are those of the author(s) and do not necessarily represent the views of the U.S. Census Bureau or the U.S. Environmental Protection Agency. All results have been reviewed to ensure that no confidential information is disclosed. We thank Wang Jin and Shital Sharma for excellent research assistance; we also thank Jim Davis at the Boston Research Data Center for his continued help, and Reed Walker and participants at the 2011 AERE Summer Conference and the Environmental Economics seminar at Harvard University?s Kennedy School for helpful comments. Any remaining errors are ours.     

Do environmental right-to-know laws affect markets? Capitalization of information in the toxic release inventory

This paper investigates how information contained in the U.S. Environmental Protection Agency's Toxic Release Inventory (TRI) program, one of the largest environmental right-to-know programs, affects prices in the housing market. I use a strengthening of the reporting requirements for the chemical lead in 2001 as exogenous variation to test for housing price changes near existing firms who must now report. Using a difference-in-differences specification, I find that listing an existing firm in the Toxic Release Inventory lowers housing prices up to 11% within approximately 1 mile. The results suggest that housing market participants do capitalize into prices at least some information conveyed by the TRI program.     

What do consumers believe about future gasoline prices?

A full understanding of how gasoline prices affect consumer behavior frequently requires information on how consumers forecast future gasoline prices. We provide the first evidence on the nature of these forecasts by analyzing two decades of data on gasoline price expectations from the Michigan Survey of Consumers. We find that average consumer beliefs are typically indistinguishable from a no-change forecast, justifying an assumption commonly made in the literature on consumer valuation of energy efficiency. We also provide evidence on circumstances in which consumer forecasts are likely to deviate from no-change and on significant cross-consumer forecast heterogeneity.     

Are energy efficiency standards justified?

This paper develops an analytical framework for comparing the welfare effects of energy efficiency standards and pricing policies for reducing gasoline, electricity, and nationwide carbon emissions. The model is parameterized with US data and includes key externalities in the energy/transportation sectors and possible underinvestment in energy efficiency due to “misperceptions” over energy savings. Even with large misperceptions, the extra welfare gains from complementing efficient pricing policies with energy efficiency standards are zero for reducing gasoline and 5 percent for reducing electricity. And when viewed as substitutes, these standards forgo 60 percent or more of the potential welfare gains from corresponding pricing policies. A combination of energy efficiency and emissions standards is more than three times as costly as carbon pricing when there is no misperception over energy savings, and even with large misperceptions, combining carbon pricing with gasoline/electricity taxes is better than combining it with energy efficiency standards.     

Do environmental regulations disproportionately affect small businesses? Evidence from the Pollution Abatement Costs and Expenditures survey

This paper examines whether the impact of environmental regulations differs by the size of the business. We consider the net effect of statutory, enforcement, and compliance asymmetries by estimating the relationship between plant size and pollution abatement expenditures, using establishment-level data on U.S. manufacturers from the Census Bureau's Pollution Abatement Costs and Expenditures (PACE) survey and from its Annual Survey of Manufactures and Census of Manufactures. We model establishments' pollution abatement operating costs (PAOC) per unit of economic activity as a function of establishment size, industry, state, and year. Our results show that PAOC intensity increases with establishment and firm size.     

Do environmental regulations disproportionately affect small businesses? Evidence from the Pollution Abatement Costs and Expenditures survey

This paper examines whether the impact of environmental regulations differs by the size of the business. We consider the net effect of statutory, enforcement, and compliance asymmetries by estimating the relationship between plant size and pollution abatement expenditures, using establishment-level data on U.S. manufacturers from the Census Bureau's Pollution Abatement Costs and Expenditures (PACE) survey and from its Annual Survey of Manufactures and Census of Manufactures. We model establishments' pollution abatement operating costs (PAOC) per unit of economic activity as a function of establishment size, industry, state, and year. Our results show that PAOC intensity increases with establishment and firm size.     

Does responsiveness to predator scents affect lizard survivorship?

Many prey organisms respond to predator scent by shifting behaviour. These alterations to behaviour are often assumed to increase an animal's chances of evading predators. Responsiveness to predator scents is therefore believed to ultimately increase a prey's chances of surviving encounters with predators. This notion is widely accepted among behavioural ecologists but has rarely been empirically tested. I staged encounters between adult snakes (Demansia psammophis) and pairs of unrestrained adult lizards (Lampropholis guichenoti) that responded strongly to snake predator scent ("responsive") or weakly to snake predator scent ("non-responsive"). Responsive lizards decreased activity and mobility during the staged encounters with snake predators. In turn this shift in behaviour decreased the chances that snakes detected responsive lizards. Since snakes almost always captured lizards that were detected, responding strongly to predator scent decreased a lizard's chances of being captured by predators. This finding is the first experimental demonstration in any terrestrial animal that responsiveness to predator scents can function to increase survival probability.     

Do exurban communities want more development?

Most land-use surveys of exurban residents focus on eliciting preferences for residential development and open space conservation. This article, in contrast, reports on a stated preference study of exurban residents that assesses the relative attractiveness of a variety of commercial and recreational land uses. Focus group participants and town planners proclaimed a demand for certain commercial services such as modern grocery stores and fine-dining restaurants, but survey respondents generally exhibit a strong preference for no additional development beyond the current rate of development. Results show that if additional development is to occur, then recreational services are generally preferred over more traditional commercial development. Combining two commercial services in a single development project are strongly preferred to stand-alone developments. Our approach illustrates how planners may uncover misconceptions about and priorities for land conversion through examining residents’ preferences.     

Do yellow-bellied marmots respond to predator vocalizations?

We conducted four experiments to determine whether yellow-bellied marmots, Marmota flaviventris, discriminate among predator vocalizations, and if so, whether the recognition mechanism is learned or experience-independent. First, we broadcast to marmots the social sounds of coyotes, Canis latrans, wolves, Canis lupus, and golden eagles, Aquila chrysaetos, as well as conspecific alarm calls. Coyotes and eagles are extant predators at our study site, while wolves have been absent since the mid-1930s. In three follow-up experiments, we reversed the eagle call and presented marmots with forward and reverse calls to control for response to general properties of call structure rather than those specifically associated with eagles, we tested for novelty by comparing responses to familiar and unfamiliar birds, and we tested for the duration of predator sounds by comparing a wolf howl (that was much longer than the coyote in the first experiment) with a long coyote howl of equal duration to the original wolf. Marmots suppressed foraging and increased looking most after presentation of the conspecific alarm call and least after that of the coyote in the first experiment, with moderate responses to wolf and eagle calls. Marmots responded more to the forward eagle call than the reverse call, a finding consistent with a recognition template. Marmots did not differentiate vocalizations from the novel and familiar birds, suggesting that novelty itself did not explain our results. Furthermore, marmots did not differentiate between a wolf howl and a coyote howl of equal duration, suggesting that the duration of the vocalizations played a role in the marmots’ response. Our results show that marmots may respond to predators based solely on acoustic stimuli. The response to currently novel wolf calls suggests that they have an experience-independent ability to identify certain predators acoustically. Marmots’ response to predator vocalizations is not unexpected because 25 of 30 species in which acoustic predator discrimination has been studied have a demonstrated ability to respond selectively to cues from their predators.