Slimy
George Newman, Margarita Gorlin & Ravi Dhar
Journal of Consumer Research, October 2014, Pages 823-839
Abstract:
Many companies offer products with social benefits that are orthogonal to performance (e.g., green products). The present studies demonstrate that information about a company’s intentions in designing the product plays an import role in consumers’ evaluations. In particular, consumers are less likely to purchase a green product when they perceive that the company intentionally made the product better for the environment compared to when the same environmental benefit occurred as an unintended side effect. This result is explained by consumers’ lay theories about resource allocation: intended (vs. unintended) green enhancements lead consumers to assume that the company diverted resources away from product quality, which in turn drives a reduction in purchase interest. The present studies also identify an important boundary condition based on the type of enhancement and show that the basic intended (vs. unintended) effect generalizes to other types of perceived tradeoffs, such as healthfulness and taste.
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Joseph Aldy
NBER Working Paper, August 2014
Abstract:
In 2010, the Gulf Coast experienced the largest oil spill, the greatest mobilization of spill response resources, and the first Gulf-wide deepwater drilling moratorium in U.S. history. Taking advantage of the unexpected nature of the spill and drilling moratorium, I estimate the net effects of these events on Gulf Coast employment and wages. Despite predictions of major job losses in Louisiana — resulting from the spill and the drilling moratorium — I find that Louisiana coastal parishes, and oil-intensive parishes in particular, experienced a net increase in employment and wages. In contrast, Gulf Coast Florida counties, especially those south of the Panhandle, experienced a decline in employment. Analysis of accommodation industry employment and wage, business establishment count, sales tax, and commercial air arrival data likewise show positive economic activity impacts in the oil-intensive coastal parishes of Louisiana and reduced economic activity along the Non-Panhandle Florida Gulf Coast.
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BYOB: How Bringing Your Own Shopping Bags Leads to Treating Yourself, and the Environment
Uma Karmarkar & Bryan Bollinger
Harvard Working Paper, January 2014
Abstract:
As concerns about climate change and resource availability become more central in public discourse, using reusable grocery bags has been strongly promoted as an environmentally and socially conscious virtue. In parallel, firms have joined policy makers in using a variety of initiatives to reduce the use of plastic bags. However, little is known about how adopting reusable bags might alter consumers' in-store behavior. Using scanner panel data from a single California location of a major grocery chain, and completely controlling for consumer heterogeneity, we demonstrate that bringing your own bags simultaneously increases your purchases of environmentally conscious and indulgent (hedonic) items. Supporting these effects, we use experimental methods to demonstrate that participants who imagined shopping with their own bags are more likely to spontaneously consider purchasing chips or dessert items, and indicate relatively higher willingness to pay for foods in these categories, as well as for organic foods. Furthermore, we show that the impact on organic and indulgent items is dissociable in a manner dependent on the consumers' motivation for bringing bags. These findings have implications for decisions related to product pricing, placement and assortment, store layout, and the choice of strategies to increase the use of reusable bags.
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Gasoline Taxes and the Great Depression: A Comparative History
Carl-Henry Geschwind
Journal of Policy History, Fall 2014, Pages 595-624
"These four years, from 1930 to 1933, were a key turning point in the international history of the gasoline tax. At the end of 1929, motor fuel imposts in Germany and New Zealand were essentially equal to that in the highest-taxed state, Florida, at $0.66 to $0.68 per U.S. gallon in 2005 U.S. dollars, while the British rate was only slightly higher at $0.84 per U.S. gallon (within the range of exchange-rate uncertainties). But by the end of 1933, in nominal terms the rate had doubled in Great Britain, more than doubled in New Zealand, and nearly tripled in Germany, while it had increased only 42 percent in Florida and 52 percent on average in the United States as a whole. At the beginning of 1934, the gasoline tax amounted to $1.96 per U.S. gallon in 2005 U.S. dollars in Great Britain, $2.24 in New Zealand, and $2.54 in Germany. Meanwhile, in the United States the combined state and federal tax ranged from $0.45 in the lowest-taxed states to $1.21 in the highest-taxed states, with the average rate being $0.70. In other words, the rates overseas during these four years moved far above the range encountered in the United States, creating a disparity that has persisted ever since."
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Automatic Bill Payment and Salience Effects: Evidence from Electricity Consumption
Steven Sexton
Review of Economics and Statistics, forthcoming
Abstract:
The introduction of automatic bill payment (ABP) programs in 2005 eliminated the need for consumers to view recurring bills. If those enrolled in ABP programs offered by utilities and other service providers forego inspection of their recurring bills, then price salience declines, prices perceived by boundedly rational agents fall, and consumption increases. This paper considers the impact of such programs on consumer demand and welfare, and empirically tests whether enrollment in such programs increases demand. Results show ABP enrollment increases residential electricity consumption 4.0% and commercial electricity consumption as much as 8.1%. Enrollment in programs designed to smooth seasonal variation in monthly utility bills of low-income customers results in 6.7% greater electricity use.
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Does awareness effect the restorative function and perception of street trees?
Ying-Hsuan Lin et al.
Frontiers in Psychology, August 2014
Abstract:
Urban streetscapes are outdoor areas in which the general public can appreciate green landscapes and engage in outdoor activities along the street. This study tested the extent to which the degree of awareness of urban street trees impacts attention restoration and perceived restorativeness. We manipulated the degree of awareness of street trees. Participants were placed into four groups and shown different images: (a) streetscapes with absolutely no trees; (b) streetscapes with flashes of trees in which participants had minimal awareness of the content; (c) streetscapes with trees; and (d) streetscapes with trees to which participants were told to pay attention. We compared the performance of 138 individuals on measures of attention and their evaluations of perceived restorativeness. Two main findings emerged. First, streetscapes with trees improved the performance of participants on attentional tests even without their awareness of the trees. Second, participants who had raised awareness of street trees performed best on the attentional test and rated the streetscapes as being more restorative. These findings enhance our knowledge about the role of an individual's awareness of restorative elements and have implications for designers and individuals who are at risk of attentional fatigue.
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Kimberly Parker et al.
Environmental Science & Technology, forthcoming
Abstract:
The disposal and leaks of hydraulic fracturing wastewater (HFW) to the environment pose human health risks. Since HFW is typically characterized by elevated salinity, concerns have been raised whether the high bromide and iodide in HFW may promote the formation of disinfection byproducts (DBPs) and alter their speciation to more toxic brominated and iodinated analogues. This study evaluated the minimum volume percentage of two Marcellus Shale and one Fayetteville Shale HFWs diluted by fresh water collected from the Ohio and Allegheny Rivers that would generate and/or alter the formation and speciation of DBPs following chlorination, chloramination, and ozonation treatments of the blended solutions. During chlorination, dilutions as low as 0.01% HFW altered the speciation toward formation of brominated and iodinated trihalomethanes (THMs) and brominated haloacetonitriles (HANs), and dilutions as low as 0.03% increased the overall formation of both compound classes. The increase in bromide concentration associated with 0.01–0.03% contribution of Marcellus HFW (a range of 70–200 μg/L for HFW with bromide = 600 mg/L) mimics the increased bromide levels observed in western Pennsylvanian surface waters following the Marcellus Shale gas production boom. Chloramination reduced HAN and regulated THM formation; however, iodinated trihalomethane formation was observed at lower pH. For municipal wastewater-impacted river water, the presence of 0.1% HFW increased the formation of N-nitrosodimethylamine (NDMA) during chloramination, particularly for the high iodide (54 ppm) Fayetteville Shale HFW. Finally, ozonation of 0.01–0.03% HFW-impacted river water resulted in significant increases in bromate formation. The results suggest that total elimination of HFW discharge and/or installation of halide-specific removal techniques in centralized brine treatment facilities may be a better strategy to mitigate impacts on downstream drinking water treatment plants than altering disinfection strategies. The potential formation of multiple DBPs in drinking water utilities in areas of shale gas development requires comprehensive monitoring plans beyond the common regulated DBPs.
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Conservation Policies: Who Responds to Price and Who Responds to Prescription?
Casey Wichman, Laura Taylor & Roger von Haefen
NBER Working Paper, September 2014
Abstract:
The efficiency properties of price and non-price instruments for conservation in environmental policy are well understood. Yet, there is little evidence comparing the effectiveness of these instruments, especially when considering water resource management. We exploit a rich panel of residential water consumption to examine heterogeneous responses to both price and non-price conservation policies during times of drought while controlling for unobservable household characteristics. Our empirical models suggest that the burden of pricing policies fall disproportionately on low-income households and fail to reduce consumption among households who generally are large consumers of water. However, prescriptive policies such as restrictions on outdoor water use result in uniform responses across income classes while simultaneously targeting reductions from households with irrigation systems or historically high consumption.
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The Persistent Impacts of Norm-Based Messaging and Their Implications for Water Conservation
María Bernedo, Paul Ferraro & Michael Price
Journal of Consumer Policy, September 2014, Pages 437-452
Abstract:
Although an increasing number of studies have demonstrated the short-term impacts of behavioral nudges to achieve public policy objectives, less is known about their longer-term impacts. In a randomized experimental design with over 100,000 households, we study the longer-term impacts of a one-time behavioral nudge that aimed to induce voluntary reductions in water use during a drought. Combining technical information, moral suasion, and social comparisons, the nudge has a surprisingly persistent effect. Although its effect size declines by almost 50% after 1 year, it remains detectable and policy-relevant six years later. In fact, the total reduction in water use achieved after the 4-month period targeted by the intervention is larger than the total reduction achieved during the target period. Further analysis suggests that the intervention works through both short-lived behavioral adjustments and longer-lived adjustments to habits or physical capital. Treatment effects are not detectable in homes from which the treated consumers have moved, which provides suggestive evidence that these longer-lived adjustments are mobile rather than incorporated into the housing stock. The persistence of the effect makes the intervention more cost-effective than previously assumed (cost drops by almost 60%). Nevertheless, water utilities may find this persistence undesirable if the nudges are intended to have only a short-run effect on demand during environmental emergencies.
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Kip Viscusi & Richard Zeckhauser
Risk Analysis, forthcoming
Abstract:
Direct experiences, we find, influence environmental risk beliefs more than the indirect experiences derived from outcomes to others. This disparity could have a rational basis. Or it could be based on behavioral proclivities in accord with the well-established availability heuristic or the vested-interest heuristic, which we introduce in this article. Using original data from a large, nationally representative sample, this article examines the perception of, and responses to, morbidity risks from tap water. Direct experiences have a stronger and more consistent effect on different measures of risk belief. Direct experiences also boost the precautionary response of drinking bottled water and drinking filtered water, while indirect experiences do not. These results are consistent with the hypothesized neglect of indirect experiences in other risk contexts, such as climate change.
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Hunt Allcott & Daniel Keniston
NBER Working Paper, September 2014
Abstract:
Does natural resource production benefit producer economies, or does it instead create a “Natural Resource Curse,” perhaps as Dutch Disease crowds out the manufacturing sector? We combine a new panel dataset of oil and gas production and reserves with county-level aggregate outcomes and restricted-access Census of Manufactures microdata to estimate how oil and gas booms have affected local economic growth in the U.S. since the 1960s. We find that a boom that doubles national oil and gas employment increases total employment by 2.9 percent in a county with one standard deviation larger oil and gas endowment. Despite substantial migration, wages also rise. Notwithstanding, manufacturing employment and output are actually pro-cyclical with oil and gas booms, because many manufacturers in resource-abundant counties supply inputs to the oil and gas sector, while many others sell locally-traded goods and benefit from increases in local demand. Manufacturers' revenue productivity also grows during booms, especially in linked and local industries, but there is no evidence that output prices rise. The results demonstrate how a meaningful share of manufacturers produce locally traded goods, and they highlight how linkages to natural resources can be a driver of manufacturing growth.
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Hazardous Waste Hits Hollywood: Superfund and Housing Prices in Los Angeles
Ralph Mastromonaco
Environmental and Resource Economics, October 2014, Pages 207-230
Abstract:
This paper contributes to the ongoing debate concerning the effect of various actions taken by the U.S. Environmental Protection Agency under CERCLA, commonly known as the Superfund Program, on housing prices. This study uses a housing transaction panel dataset encompassing the five major counties of the Los Angeles Combined Statistical Area to estimate the program’s influence on the local housing market. Using house and time-varying census tract fixed effects, I am able to avoid many of the endogeneity problems seen in previous research attempting to measure the Superfund treatment effect. An estimate of the effect on housing prices is given for each of the major events that occur under a typical Superfund remediation. After controlling for confounding correlated unobservables, I find a 7.3 % increase in sales price for houses within 3 km of a site that moves through the complete Superfund program. The analysis gives evidence of positive price appreciation for housing markets and serves as a lower bound for measuring remediation benefits.
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Adrienne Ohler & Sherrilyn Billger
Ecological Economics, November 2014, Pages 1–12
Abstract:
Electricity consumption produces private goods, such as heat for homes, but fossil fuel consumption impacts the public goods of clean air and water. While self interests can increase usage, social interests, such as global climate change, can impact an individual's attitude toward energy consumption. This paper examines the tragedy of the commons using household data, and compares the impact of self and social interests in predicting electricity consumption. Using both stated and observed behavioral data, the results show that self interests have a greater impact on energy saving behaviors and electricity use. We extend the analysis to control for an individual's environmental concern and perceived behavioral impact, finding similar results, and supporting the notion that the tragedy of the commons occurs regardless of a person's perception or environmental concern. These findings may explain why pro-environmental attitudes do not necessarily lead to pro-environmental behaviors, and it contributes to our understanding of the motivating factors for energy savings and electricity use by examining both stated and observed behaviors. Policies aimed at electricity reduction may have a greater impact if they focus on private interests, such as pricing, rebates, subsidies, and taxes, rather than social interests alone.
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Arik Levinson
NBER Working Paper, August 2014
Abstract:
From 1990 to 2008, the real value of US manufacturing output grew by one-third while the pollution emitted from US factories fell by two-thirds. What accounts for this cleanup? Prior studies have documented that a relatively small share can be explained by changes in the composition of US manufacturing – a shift towards producing relatively more goods whose production processes involve less pollution. Those studies attribute the unexplained majority to “technique”, a mix of input substitution, process changes, and end-of-pipe controls. But because that technique effect is a residual left over after other explanations, any errors or interactions in the original calculation could inflate the estimated technique. In this paper I provide the first direct estimate of the technique effect. I combine the National Emissions Inventories with the NBER-CES Manufacturing Industry Database for each of over 400 manufacturing industries. I aggregate across industries using analogs to the Laspeyres and Paasche price indexes for each of six major air pollutants. The calculations using this direct estimation of the technique effect support the research findings using indirect measures. From 1990 to 2008, production technique changes account for more than 90 percent of the overall cleanup of US manufacturing.
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An analysis of U.S. federal mileage ratings for plug-in hybrid electric vehicles
Peter Friedman & Phil Grossweiler
Energy Policy, forthcoming
Abstract:
With the introduction of plug-in hybrid electric vehicles, the US Environmental Protection Agency developed a rule to calculate “miles per gallon equivalent” (MPGe) for electric vehicle window stickers and the US Department of Energy created a separate procedure for calculation of fuel economy for use in the federally mandated corporate average fuel economy (CAFE) standards. The EPA rule fails to account for inefficiencies in or emissions resulting from the production of electricity and as a result greatly overestimates the life cycle efficiency of covered vehicles, which would be evident using “exergy analysis.” The DOE rule accounts for conversion efficiencies, but includes a long-standing, policy based factor (originally developed to reduce oil consumption by promoting alternatively fueled vehicles). This factor disproportionately raises the calculated performance of electrically powered vehicles. As a result, both the EPA and DOE rules incentivize policies that are not substantiated by the immediate technical merits.
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Impact of Oil Boom and Bust on Human Capital Investment in the U.S.
Anil Kumar
Federal Reserve Working Paper, May 2014
Abstract:
This paper uses Census IPUMS data from 1970 to 2010 to estimate the impact of the oil boom and bust on wages and human capital formation in the US. The paper finds that the oil boom between 1970 and 1980 was associated with a slower growth in the relative demand for skills in the oil and gas sector and regions where the sector had a large presence. Overall, the oil boom led to a sharp rise in real wages in oil areas relative to non-oil parts of the nation, raising the opportunity cost of additional schooling. Real wage premium for a college degree declined during the oil boom in oil-rich regions such as Texas, compared with non-oil areas. The oil boom of the 1970’s potentially had an impact on human capital investment through two channels — by raising the opportunity cost of additional schooling as well as by lowering the returns from going to college. Using a synthetic cohort approach the paper finds that relative to cohorts who went to high school in the pre-boom period, the cohort reaching high school age during the oil boom was about 2 percentage points less likely to have a college degree by the time they turned 34 to 37 years of age in 2000.
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Yueming Qiu
Environmental and Resource Economics, October 2014, Pages 295-335
Abstract:
It is widely recognized that the adoption of energy saving innovations can induce an increase in the usage of the corresponding technologies and thus can possibly increase energy consumption. Among other concerns is that uncertainties regarding the magnitude of this “rebound effect” can deter policy makers from promoting energy efficiency. This paper analyzes the rebound effects of the adoption of energy efficient technologies in commercial buildings. Based upon a structural model of technology adoption and subsequent energy demand at the building level, the empirical results are that energy efficiency can reduce electricity use by about 35 % and natural gas consumption by about 50 %.
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Seasonality in Birth Defects, Agricultural Production and Urban Location
Terra McKinnish, Daniel Rees & Peter Langlois
Economics & Human Biology, December 2014, Pages 120–128
Abstract:
This paper tests whether the strength of the “spring spike” in birth defects is related to agricultural production and urban location using Texas Birth Defects Registry data for the period 1996-2007. We find evidence of a spike in birth defects among children conceived in the spring and summer, but it is more pronounced in urban non-agricultural counties than in other types of counties. Furthermore, the spike lasts longer in urban non-agricultural counties as compared to other types of counties.