Work in Progress

Technology Complementarities and Subsidy Policy: Evidence from Electric Vehicle and Solar Panel Adoption (Link)

Government policies target air pollution and climate change by incentivizing adoption of electric vehicles (EVs) and/or residential solar panels (PVs). Knowledge of whether these goods are complements or substitutes can be used to design policies that target environmental externalities more efficiently. I use California household-level data to estimate a structural multi-product demand model. I find that consumers view PVs and EVs as complements, with the degree of complementarity varying with vehicle size and income. Counterfactual experiments reveal that complementarity significantly increases bundled EV-PV purchases. This complementarity can be leveraged to design policies that achieve emission targets at lower cost.

Endogenous Rigidities and Capital Misallocation: Evidence from Containerships

with Nicholas Vreugdenhil and Nahim Bin Zahur.

We investigate how endogenous rigidities inhibit physical capital reallocation. We focus on the role of contract duration - a classic example of an adjustment rigidity. We argue when agents sign longer contracts in booms when markets are thin, they generate a contracting externality which further amplifies thinness and impedes the adjustment of markets to shocks. We develop a framework with booms and busts where agents search and choose match duration. Applying the framework to the containership leasing market, we find substantial misallocation from endogenous rigidities, particularly in the transition after a crash. We also quantify implications for designing industrial policy.

Optimal Second-best Menu Design: Evidence from Residential Electricity Plans

with Nicolai Kuminoff,  Spencer Perry, and Nicholas Vreugdenhil.

Utilities increasingly sell electricity using complex menus of time-constant and time-varying price schedules. We study how to design such a menu to maximize social welfare in a second-best environment where the marginal private and external costs of generating electricity vary over time, institutional constraints prevent mandating time-varying pricing, and consumer behavior is distorted by frictions. We develop a model of plan choice, consumption, and intertemporal substitution with time-varying marginal social costs, and estimate it using administrative data from a large utility. We provide evidence of substantial intertemporal substitution in response to time-varying price incentives, and selection across plans based on multidimensional heterogeneity. While the current menu’s time-varying plans substantially shift consumption from high-price to low-price hours, we find that they reduce social welfare. This loss is mitigated by information frictions. We show how to redesign the menu to simultaneously improve outcomes for consumers, the utility, and the environment.

Predicting Commercial and Industrial Electricity Load

Others

“Green Economy as a Labor Productivity Factor in the Manufacturing Industry of European Union Countries” with Vladislav N. Rutskiy, Financial Journal, 2020