nep-res New Economics Papers
on Resource Economics
Issue of 2018‒04‒23
four papers chosen by
Maximo Rossi
Universidad de la República

  1. The Incidence of Carbon Taxes in U.S. Manufacturing: Lessons from Energy Cost Pass-through By Sharat Ganapati; Joseph S. Shapiro; Reed Walker
  2. Transition from a Linear Economy toward a Circular Economy in the Ramsey Model By Kiyoka Akimoto; Koichi Futagami
  3. Did the London Congestion Charge Reduce Pollution? By Colin Green; John Spencer Heywood; Maria Navarro Paniagua
  4. Energy efficiency, green technology and the pain of paying By Dayana Zhappassova; Ben Gilbert; Linda Thunstrom

  1. By: Sharat Ganapati (Dept. of Economics, Yale University); Joseph S. Shapiro (Cowles Foundation, Yale University); Reed Walker (University of California, Berkeley, IZA, & NBER)
    Abstract: This paper studies how changes in energy input costs for U.S. manufacturers a?ect the relative welfare of manufacturing producers and consumers (i.e., incidence). In doing so, we develop a novel partial equilibrium methodology designed to estimate the incidence of input taxes. This method simultaneously accounts for three determinants of incidence that are typically studied in isolation: incomplete pass-through of input costs, di?erences in industry competitiveness, and substitution amongst inputs used for production. We apply this methodology to a set of U.S. manufacturing industries for which we observe plant-level unit prices and input choices. We ?nd that about 70 percent of energy price-driven changes in input costs are passed through to consumers. We combine industry-speci?c pass-through rates with estimates of industry competitiveness to show that the share of welfare cost borne by consumers is 25-75 percent smaller (and the share borne by producers is correspondingly larger) than models featuring complete pass-through and perfect competition would suggest.
    Keywords: Pass-through, incidence, energy prices, productivity, climate change
    JEL: H22 H23 Q40 Q54
    Date: 2016–05
  2. By: Kiyoka Akimoto (Graduate School of Economics, Osaka University); Koichi Futagami (Graduate School of Economics, Osaka University)
    Abstract: We construct a Ramsey-type model where households recycle waste generated by con- sumption and the non-recycled waste has negative externality. The aim of this paper is the following two points. Firstly, we examine a structural change process from \a linear economy" based on consumption-disposal toward \a sound material-cycle economy" or \a circular economy" based on consumption-recycling. Secondly, we examine dynamics of op- timal consumption tax and recycling subsidy. Additionally, we discuss the Environmental Kuznets Curve (EKC). Previous theoretical literature explains the mechanism of the EKC through changes in production sectors such as an introduction of abatement technology or technological change. In contrast, this paper tries to explain the EKC through the aforementioned structural change process.
    Keywords: Economic growth; Environmental Kuznets Curve; Environmental policies; House- hold waste recycling; Ramsey Model
    JEL: O44 Q53 Q58
    Date: 2018–04
  3. By: Colin Green; John Spencer Heywood; Maria Navarro Paniagua
    Abstract: We examine the London congestion charge introduced in 2003 and demonstrate significant reductions in a number of pollutants relative to controls. We even find evidence of reductions per mile driven suggesting amelioration of a congestion externality. Yet, we find a robust countervailing increase in harmful NO2 likely reflecting the disproportionate share of diesel vehicles exempt from the congestion charge. This unintended consequence informs on-going concern about pollution from diesel based vehicles and provides a cautionary note regarding substitution effects implicit in congestion charging schemes.
    Keywords: Pollution, Traffic, Congestion Charging
    JEL: I18 R48 H27
    Date: 2018
  4. By: Dayana Zhappassova (Department of Economics, University of Wyoming); Ben Gilbert (Division of Economics and Business, Colorado School of Mines); Linda Thunstrom (Department of Economics, University of Wyoming)
    Abstract: It is well-known from the mental accounting literature that consumers would rather pay up-front for a luxury good like a vacation, but pay later for a durable good like a dishwasher. This occurs because the hedonic benefits and monetary costs enter differently in the mental accounts. But how does the mental accounting process change if the durable good saves money over time, as with an energy efficiency upgrade, or signals wealth and ``green status'', like a rooftop solar panel or an electric car? In this paper, we derive a mental accounting model of energy efficient and green durable investment that incorporates the consumer heterogeneity in the psychological ``pain of paying''. The model predicts that pain of paying attenuates the willingness to pay for status signaling and environmental protection, but increases the willingness to pay more up front in order to reduce long run energy bills. Consumers with a high pain of paying may therefore act as if they have a low discount rate when they are more accurately described as being conflicted about their intertemporal preferences. We test these predictions using a survey-based discrete choice experiment with solar and energy efficient homes, in which we measured individual subjects' susceptibility to pain of paying.
    Keywords: mental accounting, pain of paying, solar, energy efficiency, green durables
    JEL: Q40 Q42 D91
    Date: 2018–04

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