Essays on Environmental Economics and Transportation
This dissertation studies factors influencing fuel efficiency adoption and decarbonization of the US passenger vehicle fleet in three essays.Chapter 1 explores a common explanation for the “energy efficiency gap.” The “energy efficiency gap” is a puzzle characterized by consumer under-investment in energy-efficient products (e.g., hybrid vehicles), whose higher upfront cost is offset by future energy savings. One common but empirically unsubstantiated explanation for the gap is that creditconstraints—prohibitively high borrowing costs or a lack of access to credit—hinder consumers’ ability to make energy efficiency investments. This paper provides the first direct evidence of the relationship between credit constraints and fuel economy demand in the US new vehicle market. I find a statistically significant but economically minor negative association between auto loan interest rates and fuel economy choices, suggesting that credit constraints do not explain consumers’ failure to purchase fuel-efficient new vehicles.Chapter 2 focuses on vehicle lessee valuation of fuel cost savings and is coauthored with Benjamin Leard. Vehicle leasing involves a consumer renting a car for about three years. We show that estimating valuation of leased vehicle fuel cost savings is fundamentally different from estimating valuation of purchased vehicle fuel cost savings. We find that new vehicle lessees and buyers undervalue lifetime fuel cost savings. But because leasing periods last around three years, new vehicle lessees fully value lease-specific fuel cost savings. Our estimates also imply that leasing companies set residual values—a vehicle’s post-lease expected resale value—with the expectation that used vehicle buyers undervalue post-lease fuel cost savings.Chapter 3 explores the effect of new electric vehicle subsidies on gasoline vehicle scrappage and is coauthored with Benjamin Leard and Joshua Linn. Electric vehicles remain a promising technology for decarbonizing the transportation sector. We build an equilibrium model of the passenger vehicle fleet to show that electric vehicle purchase subsidies act as a force to accelerate the rate at which the passenger vehicle fleet turns over. By lowering electric vehicle purchase costs, subsidies shift demand away from used gasoline vehicles toward electric vehicles, which lowers equilibrium used gasoline vehicle prices and accelerates fleet turnover.
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Connecting Midstream: The Politics and Economics of Oil Transportation in the Middle East Bowlus, John Vincent (Georgetown University, 2013)This dissertation examines the political and economic significance of oil transportation in the Middle East. It argues that the June 1967 War and the closure of the Suez Canal from 1967 to 1975 transformed the patterns of ...