Is There an Energy Paradox in Fuel Economy? A Note on the Role of Consumer Heterogeneity and Sorting Bias

Previous literature finds that consumers tend to undervalue discounted future energy costs in their purchase decisions for energy-using durables. We argue that this finding could result from ignoring consumer heterogeneity in empirical analyses as opposed to true undervaluation. In the context of automobile demand, we show that, if not accounted for, consumer heterogeneity could lead to sorting, which in turn biases toward zero the estimate of marginal willingness to pay for discounted future fuel costs.energy paradox, fuel economy, consumer heterogeneity

Revenue-Recycling and the Efficiency and Spatial Distributional Impacts of Development Taxes

Recent studies that compare the efficiency and distributional impacts of alternative instruments to curb sprawl typically ignore what to do with the revenues from anti-sprawl policies, such as development taxes. This paper extends first-best analysis of development taxes aimed at preserving land at the urban fringe to account for interactions with other distortions within the urban system. By incorporating urban decline at the city core, which in turn, generates negative neighborhood spillover effects and extra pressure for development at the urban fringe, we provide a more complete framework to evaluate the efficiency and distributional impacts of development taxes. We consider three potential alternative schemes to recycle the revenues: lump sum recycling, earmarked revenues to purchase conservation easements that permanently save open space and earmarked revenues to subsidize a revitalization program at the city core. In this setting, when revenues from the development tax are earmarked to fund a conservation easement there is an additional welfare gain (relative to the lump sum case) because the threat of future conversation of open space is fully eliminated. Similarly, when revenues are earmarked to fund a revitalization program at the city core, there are additional sources of welfare that make this policy preferred relative to the lump-sum recycling scheme. Finally, we also explore the spatial distributional impacts of these three alternative recycling schemes.Urban Sprawl, Revenue-Recycling, Regional Coordination, Spatial Modeling, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy, Q31, R14, R38,

Welfare Effects of Anti-Sprawl Policies in the Presence of Urban Decline

This paper extends first-best analysis of anti-sprawl policies, such as development taxes, and examines the welfare effects of development taxes in the presence of urban decline at the city core. We find that anti-sprawl policies generate several important feedbacks within the urban system, generating additional welfare gains and affecting the level of urban decline and suburban sprawl. Further, the optimal development tax exceeds the (first-best) Pigouvian level, irrespective of whether or not revenues are returned lump-sum to all landowners or earmarked for urban decline mitigation.urban sprawl, development taxes, second-best policies, spatial modeling, Land Economics/Use,

Are there Carbon Savings from US Biofuel Policies? Accounting for Leakage in Land and Fuel Markets

This paper applies the insights of the carbon leakage literature to study the emissions consequences of biofuel policies. We develop a simple analytic framework to decompose the intended emissions impacts of biofuel policy from four sources of carbon leakage: domestic fuel markets, domestic land markets, world land markets and world crude oil markets. A numerical simulation model illustrates the magnitude of each source of leakage for combinations of two current US biofuel policies: the Volumetric Ethanol Excise Tax Credit (VEETC) and the Renewable Fuel Standard (RFS). In the presence of both land and fuel market leakage, current US biofuel policies are unlikely to reduce greenhouse gases. Four of the five policy scenarios we consider lead to increases in greenhouse gas emissions. That is, total leakage was greater than 100%. The single scenario that generates emissions savings, the removal of the VEETC in conjunction with a binding RFS, only does so because negative leakage in the domestic fuel market offset the remaining positive sources of leakage.Multi-market, carbon leakage, biofuels, greenhouse gases, Agricultural and Food Policy, Land Economics/Use, Resource /Energy Economics and Policy, Q42, Q54, Q58,

Culpability and Willingness to Pay to Reduce Negative Externalities: A Contingent Valuation and Experimental Economics Study

Financial Economics,

The impact of urban spatial structure on travel demand in the United States

The authors combine measures of urban form and public transit supply for 114 urbanized areas with the 1990 Nationwide Personal Transportation Survey to address two questions: (1) How do measures of urban form, including city shape, road density, the spatial distribution of population, and jobs-housing balance affect the annual miles driven and commute mode choices of U.S. households? (2) How does the supply of public transportation (annual route miles supplied and availability of transit stops) affect miles driven and commute mode choice? The authors find that jobs-housing balance, population centrality, and rail miles supplied significantly reduce the probability of driving to work in cities with some rail transit. Population centrality and jobs-housing balance have a significant impact on annual household vehicle miles traveled (VMT), as do city shape, road density, and (in rail cities) annual rail route miles supplied. The elasticity of VMT with respect to each variable is small, on the order of 0.10-0.20 in absolute value. However, changing several measures of form simultaneously can reduce annual VMT significantly. Moving the sample households from a city with the characteristics of Atlanta to a city with the characteristics of Boston reduces annual VMT by 25 percent.Housing&Human Habitats,Roads&Highways,Environmental Economics&Policies,Economic Theory&Research,Transport Economics Policy&Planning,Economic Theory&Research,Roads&Highways,Transport Economics Policy&Planning,Geographical Information Systems,Housing&Human Habitats

The Determinants of Credit Allocations in a Market-Based Trading System: Evidence from the RECLAIM Program

This paper examines the determinants of emission credit allocations under the Regional Clean Air Incentives Market (RECLAIM) - a program aimed at reducing nitrogen oxides (NOX) and sulfur oxides (SOX) - in the greater Los Angeles area. Our results suggest that deviations in the allocation of emission credits can be systematically explained by firm-level factors and the location of the facility. Our results also indicate that deviations in the allocation of emission credits may have been made in an attempt to regulate toxics, and that certain industries were protected in the early stages of the program

The Effects of Moratoria on Residential Development: Evidence from Harford, Howard, and Montgomery Counties

During the last decade, the state of Maryland was one of the fastest growing states in the United States. In response, the state has implemented an aggressive “smart growth” initiative. One of the most popular smart growth policies, adopted by several counties in the state of Maryland, is an Adequate Public Facility Ordinance (APFOs). An APFO is a spatially delineated land use control that aims to prevent development from occurring in areas where certain public services are overcrowded. An example of an APFO is a standard on elementary school capacity which limits the amount of new development at the school district level. Despite their extensive use, very little is known about the effects of these policies. The purpose of this report is to answer the following three questions: (1) What is the direct impact of an AFPO? That is, when a policy area is under moratoria, what is the resulting growth of new residential stock and how does that compare with policy areas that do not have moratoria? (2) What is the overall impact of the policy? In other words, does the policy reduce total new development in the county or does it simply re-direct growth from one policy area to another? (3) How much of the areas under moratorium overlap with Priority funding areas, in other words, are county land use policies in conflict with State smart growth priorities

Measuring the Effects of the Clean Air Act Amendments on Ambient PM\u3csub\u3e10\u3c/sub\u3e Concentrations: The Critical Importance of a Spatially Disaggregated Analysis

We examine the effects of the 1990 Clean Air Act Amendments (CAAAs) on ambient concentrations of PM10 in the United States between 1990 and 2005. We find that non-attainment designation has no effect on the \u27average monitor\u27 in non-attainment counties, after controlling for weather and socioeconomic characteristics at the county level. In sharp contrast, if we allow for heterogeneous treatment by type of monitor and county, we do find that the 1990 CAAAs produced substantial effects. Our best estimate suggests that PM10 concentrations at monitors with concentrations above the national annual standard dropped by between 7µg/m3 and 9µg/m3, which is roughly equivalent to a 11-14% drop. We also show that monitors which were in violation of the daily standard experience two fewer days in violation of the daily standard the following year. Empirical results suggest that this treatment effect is independent of whether the EPA has finalized the non-attainment designation

Distributional and Efficiency Impacts of Gasoline Taxes: An Econometrically Based Multi-market Study.

This item has no abstract